Brexit Border Frictions, Bumpy U.S. Ride, Biden’s Plans: Eco Day

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Welcome to Tuesday, Europe. Here’s the latest news and analysis from Bloomberg Economics to help you start the day:

  • While the mile-long lines of trucks have dissipated at ports, U.K. businesses are waking up to less visible forms of friction at the border with the European Union that may cause more enduring damage
  • The Bank of England may need to deliver more stimulus to the U.K. economy, and it’s important for officials to maintain the option of pushing interest rates into negative territory, according to policy maker Silvana Tenreyro
  • U.K. Prime Minister Boris Johnson warned he may tighten the coronavirus lockdown if people don’t follow the rules as his government backed tougher enforcement. But Johnson isn’t exactly leading by example
  • The European Union is working on a proposal for the incoming Biden administration on a new trade relationship, including settling a longstanding aircraft dispute that has seen the allies impose tariffs on $11.5 billion of each other’s exports, according to people familiar with the matter
  • The new strain of Covid-19 sweeping across Britain has been detected in a number of countries, raising the urgency of vaccinating Europe’s population against the disease. Bloomberg economists forecast double-dip recession for the eurozone
  • President-elect Joe Biden’s plan to pass a multi-trillion dollar stimulus package early in his administration faces challenges. Meantime, Wall Street strategists are going all-in on reflation bets that powered markets through last week’s U.S. political mayhem
  • Federal Reserve Bank of Richmond President Thomas Barkin says the U.S. could face a bumpy first six months but will be well supported by the rollout of Covid-19 vaccines and fiscal stimulus later in the year
  • President Donald Trump famously tweeted that “trade wars were good, and easy to win” as he began to impose tariffs on about $360 billion of imports from China. Turns out he was wrong on both counts
  • South Korea’s central bank meets this week with Governor Lee Ju-yeol flagging the fragility of an economic recovery threatened by the resurgence of the virus

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