BOE’s Negative Rate Debate, China Slowdown, Biden Jobs: Eco Day

(Bloomberg) -- Welcome to Monday, Europe. Here's the latest news and analysis from Bloomberg Economics to help you start the week.

• The Bank of England is preparing to take a significant step into the debate on whether negative interest rates should be used to stimulate the coronavirus-stricken U.K. economy
• Meantime, U.K. businesses are calling for clear roadmap to reopening the economy and a research showed closing schools in the country threatens an average earnings loss of $55,000 per student during their career
• China's efforts to control the recent resurgence of Covid-19 are undercutting its recovery. Bloomberg Economics' Chang Shu echoes that view, noting PMI readings show the expansion lost speed more abruptly than expected
• However, factory activity across much of the rest of Asia continued to hold up in January, and South Korean exports, a leading indicator for technology trade in Asia, expanded strongly again
• Germany's economy minister says tax increases are the wrong way to pay for the Covid crisis and proposed selling state assets instead
• Japan looks set to extend a state of emergency this week for major metro areas, a move that will inflict more pain on the economy
• President Joe Biden is about to get the first full look at the U.S. labor market he inherited; Biden will also meet Monday with a group of 10 Republican senators to discuss their alternative plan for Covid-19 economic relief, and he faces a dilemma
• India's annual budget on Monday will be Prime Minister Narendra Modi's chance to spur demand and investments in a badly battered economy
• The U.K. will formally request to join an 11-member transpacific trading bloc, with negotiations expected to start later this year
• Australia only recently started its QE program, yet the key question already confronting the central bank is when and how to taper

©2021 Bloomberg L.P.

With assistance from Bloomberg