Bank of England could provide money DIRECTLY to workers and businesses

Bank of England could provide money DIRECTLY to workers and businesses as new governor Andrew Bailey urges under-pressure UK firms to ‘talk to us’ before axing staff amid coronavirus crisis

  • Spoke amid speculation there could be more so-called quantitative easing
  • Move is effectively printing money to boost the economy in a crisis
  • He told Sky: ‘We will do what it takes to meet the needs of the economy’
  • Coronavirus symptoms: what are they and should you see a doctor?

The new head of the Bank of England refused to rule out direct financial payments to workers and business today as he hinted it could take radical steps to tackle the impact of coronavirus.

Mr Bailey, who took on the top fiscal role only on Monday this week, also urged businesses under threat to ‘talk to us’ or the Government about emergency funding before laying off staff.     

In an interview with Sky News, Mr Bailey, who took over from Mark Carney, said the ‘Bank of England’s not done’, amid speculation over whether it would consider a new form of so-called quantitative easing – effectively printing money – to boost the economy.

He said: ‘Everything is on the table that is reasonable, within the policy tool set.

‘We will do what it takes to meet the needs of the economy and the needs of the people of this country.

In an interview with Sky News, Mr Bailey, who took over from Mark Carney, said the ‘Bank of England’s not done’

The spoke amid speculation over whether the central bank would consider a new form of so-called quantitative easing – effectively printing money – to boost the economy

‘I don’t rule anything out, frankly, but please don’t therefore interpret it that we’re about to do it either.’

His comments come after Chancellor Rishi Sunak and the Bank unleashed a £350 billion package of support for the economy on Tuesday.

The Bank has already slashed rates to 0.25 per cent in an emergency move last week, and its policymakers are due to meet again on March 26.

But markets resumed their nosedive on Wednesday, with the FTSE 100 Index in London dropping more than 3 per cent as Wall Street opened sharply lower in America despite the measures announced in London, with similar moves worldwide.

In a separate interview with the BBC, Mr Bailey also made a plea to struggling firms not to fire employees as a knee-jerk reaction, as there may be financial support available.

He said: ‘Stop, look at what’s available, come and talk to us [or] the Government before you take that position.’

However, firms have already begun to shut sites and warn over redundancies, with retailer Laura Ashley filing for administration on Tuesday after rescue talks were halted by the coronavirus outbreak.

One of Britain’s biggest pub and restaurant owners has warned that sales are ‘getting worse by the day’ as several of its peers said they were taking a serious hit from coronavirus.

The Restaurant Group (TRG), which owns Wagamama and Frankie & Benny’s, said like-for-like sales had fallen 12.5 per cent in the last two weeks.

Sites remain open, although other restaurants and cafes, including McDonalds and Starbucks, have said they will close seating areas.

It came alongside warnings from Marston’s, which runs 1,400 pubs across the country, and Mitchells & Butlers, the owner of Toby Carvery and All Bar One.

Heavy machinery giant JCB is stopping production at its UK manufacturing plants as disruption from the coronavirus pandemic causes an unprecedented reduction in global demand, the company announced.

Production will be halted for the rest of this week and all of next week at its nine manufacturing plants in Staffordshire, Derbyshire and Wrexham.

Shop floor workers affected by the move will be paid in full during this period but no decision has been taken on what happens from the end of the month. 

Chancellor Rishi Sunak has said the Treasury is ‘working around the clock’ on a package of support measures to keep workers in their jobs through the coronavirus outbreak.

Giving evidence to the Commons Treasury Committee, Mr Sunak – who on Tuesday announced a £350 billion support package for the economy – acknowledged more needed to be done.

‘We are looking at every conceivable tool at our disposal as we speak,’ he said.

‘There is more to do and we are working at pace, urgently, to see what support we can put in place, particularly around employment support.

‘I am absolutely alive to the urgency. Everyone inside the Treasury is working around the clock to ensure that we can deliver these things and actually make sure that the support gets to people.’

Fran Boait, executive director of Positive Money, a pressure group seeking reform in finance, said the Bank’s action was welcome but she warned it may not help those most in need.

She said: ‘Any economic response to Covid-19 must prioritise protecting the most vulnerable and reducing the spread of the virus, and the measures announced so far do not do this.

‘Simply pumping new money to businesses won’t stop people who are sick or at risk needing to go to work, and there is no guarantee that these businesses won’t lay workers off.’

The Bank also fleshed out details of its new business lending scheme, unveiled by the Chancellor on Tuesday, which will offer short-term bridging finance for large firms affected by coronavirus.

It said it will be available to companies with significant employment in the UK or with UK headquarters – including firms with foreign owners that have a genuine business in Britain – though they must prove they were in sound financial health prior to the shock.

‘We will also consider whether the company generates significant revenues in the UK, serves a large number of customers in the UK or has a number of operating sites in the UK,’ said the Bank.

 

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