Britain Offers $6.2 Billion To Businesses To Battle The COVID-19 Recession
Britain has been experiencing a period of recession due to the sudden surge in COVID-19 cases. With the increase in the new strain of the virus, the administration called for a nationwide lockdown recently. To battle the economic crisis, the government announced to give a 4.6 billion pound ($6.2 billion) support package for businesses on Tuesday.
Prime Minister Boris Johnson implemented the new strict lockdown on Monday. He informed the press that the new Coronavirus variant is much more contagious than the original one and it could crush the health service within just 21 days.
Work from home is suggested for those who have the choice. The schools are closed for almost everyone. Non-essential outlets and hospitality venues are ordered to remain shut in the lockdown.
Britain is slowly sinking into a recession. The economy has shrunk in the final quarter of 2020. It will remain the same in the first quarter of 2021 if the situation stays the same. In the first two months of the 2020 lockdown, the country was hit by a record 25% fall in output.
Situations are supposed to be less critical in 2021 as most businesses have adapted to work remotely. Construction sites and factories are to stay open in the new lockdown.
Economist J.P. Morgan still predicts that there will be a nearly 2.5% drop in output in Britain for the first three months of 2021.
Finance minister Rishi Sunak has called for an emergency help fund to rejuvenate the economy that includes a huge job protection scheme. The fund is worth 280 billion pounds and is set to run till April ends.
The additional measures of Tuesday are going to offer a one-time grant of 9000 pounds to the retail, hospitality, and leisure companies. The total cost of the project is almost 4 billion pounds. The government will also offer 600 million pounds of grants to other businesses.
The finance minister said that the one-off grant will ‘help businesses to get through the months ahead’. He also said that this move will ‘help sustain jobs’. The workers will still have jobs when businesses reopen.
The Bank of England has been purchasing government debt and increased its asset purchase program to nearly 900 billion pounds. They hope to utilize it in the year 2021.
The British Chambers of Commerce has very little faith in Sunak’s ‘drip-feed approach’ to help the businesses in the coming months. According to them, many businesses will fail as they will not be qualified to get government help.
BCC director-general Adam Marshall expressed his concern that while the instant monetary help is going to benefit the businesses, it will not be ‘enough to save many firms.’
Among all the members of the G7, Britain has experienced the most economic devastation economy in the second quarter of 2020. The Organisation for Economic Cooperation and Development has calculated that Britain’s economic recovery in 2021 will be the slowest except Argentina.
I am Darryl Broadhurst and i give investors an insight into the most recent news hitting the “Technology” sector in Wall Street. I have been an independent financial adviser for over 11 years in the city and in recent years turned my experience in finance and passion for journalism into a full time role. I perform analysis of Companies and publicizes valuable information for shareholder community.
