UK to give $399bn of loans to tide over coronavirus outbreak
LONDON: The British government will provide 330 billion pounds (about 399 billion US dollars) of loans to businesses to support firms to get through the difficult moments as the coronavirus outbreak escalates in the country, said the Chancellor of the Exchequer Rishi Sunak on Tuesday.
Sunak told a daily press conference, “If demand is greater than the initial 330 billion pounds, I’m making it available today, I will go further and provide as much capacity as required. I said whatever it takes, and I meant it.”
The announcement came just six days after the British government last Wednesday pledged a 30-billion-pound stimulus plan to shore up the country’s economy amid the COVID-19 outbreak in its first post-Brexit budget.
Sunak said,“Some sectors are facing particularly acute challenges. In the coming days, my colleague the Secretary of State for Transport and I will discuss a potential support package specifically for airlines and airports.”
Suffering from the rapid spread of COVID-19 and government travel restrictions, British airlines have announced new actions to address the negative impact, including cutting sharply flights in the coming weeks and reducing operating expenses, as they urged the government to give substantial emergency supports.
In addition to the enormous financial support package promised, Sunak also pledged to provide funding grants of up to 25,000 pounds for small businesses.
Meanwhile, “every single shop, pub, theatre, music venue, restaurant... will pay no business rates for 12 months,” said Sunak.
On the same day, British Treasury and the Bank of England announced a Covid Corporate Financing Facility (CCFF) to offer additional help for firms to bridge through COVID 19 related disruption to their cash flows.
“The CCFF will provide funding to businesses by purchasing commercial paper of up to oneyear maturity, issued by firms making a material contribution to the UK economy,” said a statement, adding that “it will help businesses across a range of sectors to pay wages and suppliers, even while experiencing severe disruption to cashflows.”
“Taken together the actions announced by HM Treasury and the Bank of England will help UK businesses and households to bridge a temporarily difficult period and thereby to mitigate any longerlasting effects of COVID-19 on jobs, growth and the UK economy,” said the statement.