Sir Patrick Vallance has warned that unless extra precautions are taken, COVID cases could reach 50,000 day. It is in this light that the Chancellor has decided to extend the COVID business loan scheme. As assessments are made by the government regarding how to slow the spread of coronavirus after lockdown measures were eased and schools opened, Sunak is set to extend four state-backed loan schemes until the end of November.
It comes as the Business Banking Resolution Service is set to launch, seeing seven of the UK’s big name banks signing up to settle concerns. The government has given away £53bn to struggling businesses since the crisis began, however, all four loan schemes were set to close by the beginning of November, with three closing to new applications this month. The latter offers 80% backing by the Treasury on commercial bank loans whilst the fourth, which gives banks full government backing, would be the last to close.
The FTSE 100 has fallen by more than 3% today and the hospitality sector is amongst the worst affected. This could be exacerbated when Professor Chris Whitty’s advice for households to ‘break unnecessary links’ comes into effect. Prime minister Boris Johnson is set to announce the next steps in tackling the coronavirus pandemic tomorrow in an emergency Cobra meeting which will delineate which industries are to be affected, with pubs and restaurants potentially being asked to close their doors for a second time.
Protective measures for the COVID crisis instated after the announcements made by Sir Vallance and Chris Whitty could see the UK economy hit hard. The Coronavirus Job Retention Scheme, set to end on October 31st, is another facet of the protective measures instilled to ensure the economy continues running relatively smoothly that is likely to continue, after calls for the counselor to delay scrapping it. This comes as the previous chancellor, George Osborne, asks Sunak to default debts incurred by businesses through the loan schemes. At the time of writing, Chief medical officers have suggested that the UK move it’s coronavirus alert from level 3 to 4, suggesting a level of urgency that might foreshadow greater changes in the coming weeks.