UK pumps €50bn into businesses during Covid-19 crisis so far

Britain’s government has underwritten £45bn (€50bn) borrowing by businesses hit by the coronavirus and spent more than £27bn so far to support jobs, finance ministry figures showed.
UK pumps €50bn into businesses during Covid-19 crisis so far
Chancellor of the Exchequer Rishi Sunak walks through from the foreign office to Downing Street after the introduction of measures to bring the country out of lockdown.
Chancellor of the Exchequer Rishi Sunak walks through from the foreign office to Downing Street after the introduction of measures to bring the country out of lockdown.

Additional reporting by Eamon Quinn

Britain’s government has underwritten £45bn (€50bn) borrowing by businesses hit by the coronavirus and spent more than £27bn so far to support jobs, finance ministry figures showed.

Total spending under the Coronavirus Job Retention Scheme, which supports 9.4 million jobs and is the costliest UK government coronavirus measure, rose to £27.4bn as of July 5 from £25.5bn a week earlier.

State-backed lending to small businesses - which receives a 100% government guarantee - rose to almost £40bn. Lending to medium-sized and large firms increased to almost £11.5bn and £2.6bn respectively in two programmes which offer an 80% guarantee to lenders.

The UK supports are closely watched here as Finance Ministre Paschal Donohoe prepares a stimulus package later this month.

The number of UK shoppers visiting retailers was down by nearly 50% last week compared with a year earlier and the amount of money spent in pubs and restaurants as they reopened last weekend suffered a similar fall, new data showed.

The figures came a day before UK chancellor Rishi Sunak is due to announce his latest moves to steer Britain’s economy away from its 25% collapse in March and April, which media have said might include targeted cuts in Vat.

Mr Sunak is considering measures ranging from tax cuts to hiring incentives as he tries to steer the UK's economy towards recovery after a 25% coronavirus crash in March and April.

Mr Sunak is due to announce new ways of helping the economy later today, followed by a budget statement in the autumn.

A string of job cut announcements has underscored the risk of a big jump in unemployment as the UK government prepares to wind down its huge job retention plan in the coming months.

Britain temporarily cut Vat in 2008 during the global financial crisis and Germany did the same last week for six months.

Mr Sunak has said he would first need to see how quickly consumers resume spending before following suit.

Meanwhile, The British Retail Consortium (BRC) said footfall in shopping streets and centres fell by almost 50% year on year, only a slightly less severe decline than the previous week’s 53.4% slide.

Non-essential retailers were allowed to reopen in England on June 15 while Scotland, Wales and Northern Ireland have also relaxed their restrictions now.

“By European standards, the UK’s recovery remains slow, and while safety measures introduced by retailers have been well received by customers, many shoppers are still reluctant to visit physical shopping locations,” the BRC’s chief executive Helen Dickinson said.

Separately, Barclaycard said the total value of transactions across hospitality, leisure, and entertainment between July 4-5 was down 45% compared with the same weekend last year.

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