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UK Ministers are reportedly considering keeping schools closed throughout January amid fears that Children might be fuelling the spread of a recently detected strain of Covid-19 that is currently thought to be about 70% more transmissible, reported the Telegraph. 

Teaching unions have reportedly been writing to the UK PM demanding that he delay the typical post-Christmas holiday re-opening of schools in early January, citing “growing evidence” that the new variant of the virus infects children more effectively. 

Similar concerns are being expressed by UK scientists who advise the government from the New and Emerging Respiratory Virus Threats Advisory Group (called Nervtag); the group has raised concerns that higher transmissibility amongst children might explain why the virus continued to spread in some areas during the second lockdown when schools were open despite more adults staying at home.   

Market Reaction

GBP did not see much of a reaction; GBP/USD is flat around 1.3450 and EUR/GBP is flat around 0.9100. Markets are at present much more focused on the theme of Brexit after UK PM Boris Johnson reportedly made a new, more favourable offer to the EU on its fishing rights in UK waters. GBP traders await the EU response to this offer and to see whether it can breathe life back into negotiations that ha reached a standstill. 

But note that if this story about UK school closures does gain traction, this could be seen as a GBP negative; school closures typically have a devastating effect on the economy by removing a key form of childcare for working parents and hampering their ability to participate in the workforce. In other words, January school closures = weaker January GDP. But with today’s news that half a million Brits have already been vaccinated with the first dose of the Pfizer/BioNTech jab, will “light at the end of the pandemic tunnel” continue to prevail?