The coronavirus outbreak undoubtedly has caused a lot of damage to the economy globally. With no solution being found for the problem, In the UK, the destruction of key financial services is significantly seen as it enters its 4th week of lockdown.
Except for demand, profitability and employment other financial firms will sharply stop in the coming months, said The Confederation of British Industry (CBI) on Tuesday.
A survey was carried out before the social distancing measures were actually imposed which revealed that the economy all around the globe has turned into a disaster. In the case of the UK, all not so necessary businesses are shut and the majority of the population is staying at home as it enters the fourth week of lockdown.
However, not long ago when the lockdown measures weren’t taken and the survey was carried out, COVID-19 was already leaving its sign by hampering the economy.
“The bulk of the survey took place before social distancing measures were ramped up. But there were already signs of the COVID-19 pandemic leaving its mark. Expectations for business volumes and headcount weakened, non-performing loans rose sharply, and financial firms are planning heavy cuts to investment in the year ahead”
Rain Newton-Smith, CBI Chief Economist said,
In another report in the Times, Rishi Sunak, UK Chancellor said that there’s a possibility for the GDP to shrink up to 30% this quarter that is between April and June because of the lockdown. However, according to another newspaper, Sunak is trying to be a little easier on the everyday life restrictions that have been imposed.
Despite the crashing economy, a Treasury spokesman said that they have emergency funding for public services in place which has now totaled 14 billion pounds ($17 billion), from 5 billion pounds which were announced in Sunak’s annual budget before the lockdown was imposed. The funding includes for the National Health Service(NHS) and for local authorities who provide social care for the elderly. This is being done to provide all the necessary help to the public service workers so that they can do everything to keep the population safe from the pandemic.
Alok Sharma, a business minister has said that 4,200 small and medium-sized businesses have received rescue loans as part of the government’s coronavirus business interruption loan scheme. This scheme is designed in order to provide loans to small and medium businesses of up to 5 million pounds each.
Seeing the above measures of providing loans, taken by the government, the newly appointed business policy chief of opposition Labour Party’s, Ed Miliband, tweeted. “The risk of doing too little too slowly is much greater than the risk of doing too much, too quickly.”
The tweet was made after he said that the government should definitely go by providing loans of smaller amounts.
In the statement made by Dominic Raab, the foreign secretary who is currently deputizing for prime minister Boris Johnson said that they still have a long way to go. The former is deputizing in place of the latter as Johnson is currently recovering from the virus.
“We’re still not moving ahead from the peak of this virus. We don’t expect to make any changes to the measures that are in place currently at that point. And we won’t until we’re confident as we realistically can be that any such changes can be safely made.”