This post was originally published on this site
Britain faces a “significant but temporary impact” to its economy due to the escalating global effect of coronavirus, Chancellor Rishi Sunak warned on Wednesday.
The former Goldman Sachs banker, who took the position as head of the U.K.’s finances just four weeks ago, used his first budget announcement to unveil a £30 billion ($39 billion) spending boost to tackle the impact of coronavirus and support the economy.
Measures include:
• A £5 billion emergency fund to help the National Health Service bolster its resources
• A loan scheme for banks to support small businesses to the tune of £1.2 billion
• Support for workers in the gig economy with sick pay available to everyone self-isolating
• Relaxation or delays to paying some taxes including business rates, a levy based on property.
This is the first budget of a new government lead by Prime Minister Boris Johnson, the first of a new decade, and the first since the UK’s departure from the European Union earlier this year.
Read: In the U.K., you’re either a Leaver or Remainer. Bridging that Brexit divide isn’t easy.
Sunak said: “I want to set out our economic response. So that we bring stability and security. The British people may be worried but they are not daunted. Our economy is robust, our public finances our sound, our public services are well prepared.
“The challenge is that there is likely to be a temporary disruption to our economy on the supply side. Up to a fifth of the working age population could need to be off work at any one time, and business supply chains are being disrupted around the globe.
“This combination of people being unable to work and businesses being unable to access goods will mean that for a period our productive capacity will shrink.”
Sunak said the Office for Budget Responsibility, which provides independent analysis of public finances, had “slightly” reduced its forecast for GDP growth to 1.1% in 2020 from a forecast of 1.4% the same time last year.
The government has teamed up with the Bank of England in a coordinated attack on coronavirus. The central bank cut interest rates on Wednesday by 50 basis points to 0.25% in a surprise move.
Read: Pet dog in Hong Kong found to have ‘low level’ of coronavirus
The U.S. may follow the U.K’s lead – but Treasury Secretary Steven Mnuchin said on Wednesday a robust stimulus bill would have to wait as it won’t be able to pass Congress quickly. Instead he supported a smaller measure to help small businesses and workers tackle the virus.
