MNI Gilt Week Ahead - January 11, 2021

• The impact of Covid-19 on the UK economy will continue to dominate UK focus this week. The UK's mass Covid vaccinations centres will open today, with the continuing aim to get all healthcare workers, the extremely clinically vulnerable and over 80s vaccinated by 15 February. Further out all other high risk people and over 65s are currently expected to receive a first dose of the vaccine by Easter and Matt Hancock said this weekend that all adults would be offered a Covid vaccine by the autumn. The priority for the second phase of vaccinations is currently being discussed but no announcement is expected until next month. Today will also see vaccination data begin to be published on a daily basis. The most recent announcement was that 1/3 over 80s had been offered a vaccination so far. It also remains to be seen whether further restrictions to slow the spread of Covid-19 will be brought in or whether the current restrictions will just be enforced more rigorously.
• Against this backdrop there will be two MPC speeches worth watching today. First, on Monday Tenreyo will give a speech entitled "Let's talk about negative rates" in which she will assess the international evidence. Tenreyro has previously said that evidence from the Eurozone in particular has been positive, so it will be interesting to see if she goes any further than previously or any comments she makes about suitability in the UK. Note that the review of negative rates will be published alongside the February Monetary Policy Report on 4 February. On Tuesday, Broadbent will give a speech "Covid and the composition of spending".
• Furthermore, there will also be key November activity data released on Friday. Although this data is now somewhat stale, the current Covid restrictions are largely in line with those seen during the November lockdown, so this will may give the best indication of the hit to GDP we are likely to see in weeks ahead.

GiltWeekAhead11012021.pdf