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Boris Johnson has urged the public to be cautious as England returns to indoor socialising while the Indian coronavirus variant spreads.
Pubs and restaurants can serve customers inside from today, while six people or two households can meet indoors and overnight stays are allowed.
The ban on foreign holidays has also lifted, cinemas, hotels and B&Bs can reopen and hugs between friends and family are permitted.
However, the spread of the Indian COVID-19 variant has led the prime minister to call for a “heavy dose of caution”, while the British Medical Association (BMA) said it was a “real worry” that indoor socialising was returning.
The Indian strain is feared to be as much as 50% more transmissible than the Kent variant.
On Sunday, health secretary Matt Hancock did not rule out the possibility of imposing local lockdowns in areas such as Bolton to tackle the Indian variant, which he warned could “spread like wildfire”.
He said there are more than 1,300 cases of the Indian variant of concern, which is “relatively widespread in small numbers” and is becoming “the dominant strain” in Bolton and Blackburn.
Johnson said: “Together we have reached another milestone in our roadmap out of lockdown, but we must take this next step with a heavy dose of caution.
“We are keeping the spread of the variant first identified in India under close observation and taking swift action where infection rates are rising.”
Hancock said “new very early data” from Oxford University showed that existing vaccines work against the Indian variant.
“That means that we can stay on course with our strategy of using the vaccine to deal with the pandemic and opening up carefully and cautiously, but we do need to be really very vigilant to the spread of the disease,” he told Sky News.
“We have a high degree of confidence that the vaccine will overcome.”
Sir John Bell, Oxford’s regius professor of medicine, said the result of lab experiments investigating whether the vaccine neutralises the Indian variant “looks okay”.
“It’s not perfect, but it’s not catastrophically bad,” he told Times Radio, adding there is only “a slight reduction in the ability to neutralise the virus”.
Hancock said there had been no known deaths from the Indian variant in Bolton of somebody who has received both jabs.
Five people have been in hospital with it after receiving their first vaccine dose, while one person who had received both doses had been admitted “but that person was frail”, Hancock told BBC’s The Andrew Marr Show.
Watch: 'Increasing confidence' vaccine works against Indian variant, says Hancock