Britain launches £30bn stimulus, shock rate cut
LONDON: Britain’s government and the Bank of England yesterday launched a coordinated emergency response to the country’s “significant but temporary” economic impact from the coronavirus, pledging fiscal stimulus worth £30 billion ($39 billion, 34.4 billion euros) and slashing interest rates to a record-low 0.25 percent.
The effects of COVID-19 “will have a significant impact on the UK economy-but it will be temporary”, finance minister Rishi Sunak told parliament as he announced a stimulus package, notably to help small businesses struck down by disruptions to supply chains and an absent workforce.
There is likely to be a “temporary disruption” to the economy while up to a fifth of the UK’s working-age population could be off sick at any one time, Chancellor of the Exchequer Sunak warned.
On Tuesday, it was revealed that a minister in the health department, Nadine Dorries, had tested positive for COVID-19. Six people have died in Britain from the virus, with more than 370 confirmed cases. “I am announcing today in total a £30-billion fiscal stimulus to support British people, British jobs and British businesses through this moment,” said Sunak on delivering the government’s first post-Brexit budget, one that was dominated by action to tackle the coronavirus crisis.
“If further action is needed if the situation evolves... I will not hesitate to act,” added the 39-year-old finance minister in an hour-long speech outlining also plans for big UK infrastructure projects. The Bank of England earlier revealed that at an extraordinary meeting on Tuesday, “the Monetary Policy Committee voted unanimously to reduce Bank Rate by 50 basis points to 0.25 percent”-its biggest cut since the global financial crisis more than a decade ago. — AFP