Andrew Bailey the new governor of the Bank of England has urged businesses not to let staff go due to the COVID-19 crisis, but first, think of the support that has been made available to them.
Mr Bailey said that the message the central bank wishes to get across to companies, is that “we will be there to support your needs”.
He added that UK firms should “stop, look at what’s available, come and talk to us or the Government before you take that position”.
Multiple firms are taking a financial hit due to COVID-19.
On the 17/03/20 Rishi Sunak, Chancellor of the Exchequer announced a £350 billion package of financial measures to help companies and employers. The Chancellor also stated that £20 billion of this package would be used in other aid.
Mr Sunak said:
We will support jobs, we will support incomes, we will support businesses, and we will help you protect your loved ones,
Today, I am making available an initial £330 billion of guarantees – equivalent to 15 per cent of our GDP.
That means any business who needs access to cash to pay their rent, the salaries, suppliers, or purchase stock, will be able to access a government-backed loan, on attractive terms.
The new governor took over from Mark Carney this week during the spread of COVID-19. Mr Bailey said:
This is a crisis we’re all in. It’s an emergency situation.
When Mr Bailey was asked that the effect of COVID-19 would be “large, sharp but temporary” in the bank’s words, he said:
There’s two parts. First of all, of course, is how long Covid itself is going to go on for, obviously that’s not something that as a central bank, we have an expertise in. We’re working very closely with epidemiologists to understand that. That will obviously have an effect on the economy, no question about that.
The second part – which we emphasised last week – which we are very keen also to ensure doesn’t happen is that the economic effects that materialise during the period of Covid then get extended onwards by virtue of effectively the damage that’s done to the economy and that’s something that we want to want to minimise and stop.