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Coronavirus: Rishi Sunak prepares fresh economic bailout as crisis deepens

Coronavirus: Rishi Sunak prepares fresh economic bailout as crisis deepens

The Chancellor has already unveiled a £12bn stimulus for hard-hit firms.

3 min read

Rishi Sunak will beef up the financial support offered to businesses hit by the coronavirus amid calls to avoid a "catastrophic" hit to the economy.

The Chancellor will join Boris Johnson at his latest daily press conference on the outbreak, with The Times reporting he has now begun work on a "significant new bailout" for affected businesses.

Mr Sunak said: "We are doing everything we can to keep this country, and our people, healthy and financially secure. As I said at Budget we will do what is needed to support the economy and business, and are working rapidly to provide more support."

One of his Tory predecessors at Number 11, George Osborne, said the Government should underwrite hundreds of billion of pounds-worth of bank loans to keep small businesses going through the crisis.

The move comes after Mr Johnson told Brits to avoid pubs, restaurants and theatres for the foreseeable future, in a major escalation of the Government's advice to combat the spread of the disease.

Those with the symptoms of the illness - a persistent cough and temperature above 37 degrees - have been told to isolate at home with their families for 14 days, while the over-70s, pregnant women and those with underlying health conditions should avoid "social contact" with others for the next 12 weeks, starting from this weekend.

But sectors expected to be hit by the advice have blasted the Prime Minister for his call to "avoid pubs, clubs, theatres and other such social venues".

UK Music, which represents the British music industry, said cancellations would cause "immense damage".

Acting chief executive Tom Kiehl added: "The Prime Minister's latest advice on mass gatherings has resulted in huge uncertainty and confusion over what exactly it will mean for the music industry."

He added: "The Government must spell out whether there will be a formal ban, when that might come into effect, which venues and events will be impacted and how long the measures will remain in place.

"The virus is having a catastrophic impact on the UK music industry and will threaten many jobs and businesses across our right across our sector."

Kate Nicholls, chief executive of trade body UK Hospitality, said Mr Johnson’s announcement had been "catastrophic".

She warned: “The Government has effectively shut the hospitality industry without any support, and this announcement will lead to thousands of businesses closing their doors for good, and hundreds of thousands of job losses."

That view was echoed by Emma McClarkin, chief executive of the British Beer and Pub Association.

She said: "The very existence of thousands of pubs and a lot more jobs is now at risk.

"The Government needs to give clear instructions and detail on the support package to rescue the sector and hundreds of thousands of jobs.

"Urgent measures to support cash flows and enable cost reductions is an absolute necessity."

Last week's Budget saw the Chancellor unveil a £12bn economic stimulus package to try to counter the shock of the coronavirus outbreak.

That included a business rates holiday for firms with fewer than 250 employees and the refunding of sick pay by the Government for small businesses.

The Bank of England has also slashed interest rates from 0.75% to 0.25%.

But former Chancellor George Osborne said it was time "for a massive government scheme to underwrite bank loans to businesses - and help them and their employees through this crisis".

He tweeted: "£100s billions pounds in scale. Budget measures last week were fine, but not enough."

Labour's Jeremy Corbyn on Monday night called on the Government to "invest in public services and to introduce urgent financial support for those affected by the Coronavirus," a party spokesperson said.

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