LONDON — The British government on Tuesday announced a £330 billion rescue package of loan guarantees to help U.K. businesses survive the coronavirus pandemic.
Speaking from Downing Street, U.K. Chancellor Rishi Sunak said government intervention was necessary “on a scale unimaginable only a few weeks ago.”
“We have never in peacetime faced an economic fight like this one,” Sunak said. Businesses throughout the country have warned of a profound economic downturn in the wake of new virus containment measures that have seen all British people told to avoid public meeting places and work from home if possible, with many firms, especially in the hospitality sector, fearing bankruptcy.
The bailout fund — which will be made available to businesses via government-backed and guaranteed loans — amounts to 15 percent of U.K. GDP and comes in the wake of similar economic interventions in France, Spain and other countries.
Sunak said the loan scheme would be “up and running” next week. The government would go further if required, he added.
“And if demand is greater than the initial £330 billion I’m making available today, I will go further and provide as much capacity as required,” Sunak said.
For some of the small and medium-sized businesses most at risk of collapse, business interruption loan limits would be increased from £1.2 million to £5 million, with no interest due for six months. Larger firms would be able to access a new lending facility to provide low-cost financing.
The package of support also included a three-month mortgage holiday for homeowners.
Sunak urged any businesses that were already making decisions to lay off workers to stall such actions and look at the details of the newly-announced support.
The new measures come just a week after Sunak’s first budget statement, which set out an initial £12 billion support package for businesses affected by the outbreak.