What can we learn from Iceland’s virus spike?

The recent spike in virus cases in Iceland has raised eyebrows given the country’s high degree of vaccination coverage. Although the cause of the surge is unclear, Iceland’s experience appears to support the argument that governments should not be too hasty in dismantling all virus-related restrictions. Next week, the Norges Bank’s announcement on Thursday is likely to be a sleepy-August affair ahead of interest rate lift-off in September. Meanwhile, the release of monthly GDP data for June is likely to show that the mainland economy bounded into summer with a spring in its step and re-gained its pre-virus level.