UK lockdown exit plans, HSBC results, Powell appears before Congress

The UK should get to hear some good news for a change this week when Boris Johnson lays out his plans to ease slowly Covid lockdown restrictions. Investors will watch closely as the heads of both the UK and US central banks appear before their respective legislatures, and there is plenty of economic data due from both sides of the Atlantic too. On the corporate side, the week belongs to HSBC, which is expected to spell out some big strategic changes alongside its full-year results.

UK lockdown exit

Boris Johnson is on Monday due to set out a government road map to lift England’s lockdown from next month, as data suggested that coronavirus infections were falling 3-6 per cent per day.

The UK prime minister is expected to lay out plans for a mass return to schools on March 8, and then proceed with a “prudent” reopening of much of the economy by the summer. He has said he wants to ensure “cautious but irreversible” progress in tackling the virus that has caused nearly 120,000 deaths.

Government insiders said the publication of the road map will see a decisive shift away from strict legal restrictions, backed by heavy fines, towards an approach based on encouraging people to take care.

The rules on social distancing are under review but people will still be urged to wash their hands and wear masks to control the spread of the disease as the economy gradually opens.

Government scientists last week put the official estimate of R, the average number of people to whom someone infected passes the virus, is in the range 0.6 to 0.9 for the UK as a whole. The week before the range was 0.7 to 0.9.

As with previous reopenings, hospitality is expected to start initially with a focus on operating outdoors, with April pencilled in by some ministers as a likely date for pubs to serve takeaway pints.

Officials close to the road map preparations said they will also do away with a requirement that pubs serve a “substantial meal” alongside alcohol — the controversial “scotch egg” clause.

Johnson puts final touches to cautious easing of England lockdown

Elsewhere . . . 

Russia’s president Vladimir Putin will on Monday holds talks with his Belarusian counterpart Alexander Lukashenko, who has faced intense political pressure from the opposition since a contested election last year.

Hong Kong will release its budget on Wednesday, with economists expecting limited spending measures as an extended recession and repeated stimulus over the past year has expanded the government deficit to a record and shrunk the fiscal reserve.

Earnings reports

The rest of the big UK banks are in action after NatWest and Barclays set the scene with their full-year reports last week.

Big changes are on the way at HSBC, which is expected, alongside its full-year results, to give a strategic update where it will raise the relocation of top executives from London to Hong Kong and a withdrawal from consumer banking in the US after concluding it cannot turn around the struggling unit

Exiting the 150-branch US retail network would mark the end of the lender’s 40-year long attempt to run a full-service bank there. The division has been lossmaking for the past three years.

The moves are intended to galvanise an overhaul effort announced only in February last year to redeploy more than $100bn of capital to Asia and slash 35,000 jobs.

The bank is also expected to deepen cost-cutting measures, speed up plans to simplify its bureaucratic organisational structure and update on the sale process of its 200-branch French retail network.

HSBC is also facing pressure from senior staff who are braced for a drop in their annual bonuses when they are announced this week. Like many lenders, HSBC suffered a sharp drop in profit in 2020 because of a surge in bad debt charges during the Covid-19 pandemic and a fall in client activity.

Lloyds, which also suffered a loss in the first half of 2020 because of bad loan provisions, has sounded a more…