0.1% Rates slashed to record low. ... so is a cash handout next?

Base rate at historic low as Sunak bids to help worried workers

CHANCELLOR Rishi Sunak will unveil a multi-billion pound package to help firms keep workers on their payrolls today after the Bank of England slashed interest rates to a record low.

In a dramatic move to keep the economy afloat, the Bank yesterday cut rates to an all-time low of just 0.1 per cent. With huge numbers of firms on the brink and fears over thousands of jobs, it was the second emergency cut in just over a week.

Amid warnings that the UK is set to plunge into recession, the Bank’s new Governor Andrew Bailey said: ‘Things have happened in the past couple of weeks that none of us could have predicted. The world has moved on at a frightening pace and we are responding to it. The time to act is now when we have the economic data.’

Mr Bailey also indicated that he and Mr Sunak had discussed a range of other emergency measures to help individual workers.

President Donald Trump has already announced plans to send cheques directly to Americans as part of a $1trillion (£852billion) support package. Asked yesterday whether similar action could be taken in the UK, Mr Bailey said ‘nothing is off the table’.

Last night Boris Johnson said the Chancellor was going to make an announcement today on what was being done to support firms to keep workers employed and on their payrolls. It is not yet known if this will be a US-style plan to give money directly to households or income support for firms to enable them to keep paying their staff rather than laying them off.

Mr Sunak has already announced £330billion in loans for firms and a business rates holiday for smaller companies to prop up the economy. But the Government has conceded it will not be enough and will today pledge further measures so people do not lose their jobs.

Yesterday a Treasury source said: ‘The scale will match the problem so it will be big.’

Speaking last night, the Prime Minister urged companies to stand behind their workers and to ‘really think very carefully before you start laying off your staff’.

He said: ‘I say to business – stand by your employees, stand by your workers.’ It followed criticism from former Prime Minister Gordon Brown and Tory backbenchers that not enough was being done to reassure businesses who were letting staff go.

Mr Brown urged the Chancellor to do ‘considerably more’ to protect jobs. He told BBC Radio 4’s Today programme: ‘He says he’ll do more but the package should be out now to avoid redundancies being forced upon companies over the next day or two. I think a lot of company directors will be looking at the moment to how many staff they are going to shed in the next few days, next few weeks.

‘And I think we need to step in now with building the confidence that we can keep people in work ... and have an arrangement with people where they take some holidays but at the same time they are going to have income protection.’

Treasury minister John Glen faced an angry backlash from Tory MPs during an urgent question in the House of Commons on employment support.

Greg Clark, the former business secretary who tabled the question, said the loan scheme announced on Tuesday was ‘not enough’ to prevent businesses laying off staff.

Yesterday the Bank of England took action to help the economy by cutting the base rate used to set the cost of mortgages and loans from 0.25 per cent, to just 0.1 per cent. This is the lowest interest rates have been in the Bank’s 325year history, reflecting the gigantic scale of the crisis.

Members of the Bank’s Monetary Policy Committee took the decision unanimously after an emergency meeting yesterday.

The Bank also revealed plans to pump £200billion into the economy via quantitative easing.

It stressed the economic shock caused by Covid-19 could be ‘sharp and large, but should be temporary’. The rate cut should drive down the cost of borrowing for millions, including businesses and households whose finances have been hammered by the pandemic.

But it was described as ‘devastating news’ for savers. The cut comes just over a week after it was lowered from 0.75 per cent to 0.25 per cent.

Edinburgh Airport is looking to shed at least 100 jobs as it faces ‘close to zero’ passenger demand.

The airport employs 750 staff and there are more than 6,000 workers in other businesses based in and around it.

Airport staff will be offered unpaid leave and redundancy as part of a ‘consolidation plan’.

It is expected that the airport will operate freight, mail and medical flights alone within two weeks. Airport chief executive Gordon Dewar said the aim was to protect as many jobs as possible while ensuring the airport stays open.