Even before Rishi Sunak delivered the “Coronavirus Budget 2020” – his first budget as Chancellor of The Exchequer – we already had a set of extraordinary circumstances.
His appointment as Chancellor following the resignation of Sajid Javid on 13th February 2020 was one of those. Javid resigned after Boris Johnson’s cabinet reshuffle. He had rejected the Prime Minister’s order to fire his team of aides, saying “no self-respecting minister” could accept such a condition.
Less than a month later, on 11th March 2020, the Government (and the world) have Coronavirus as its most pressing matter. On the day Javid resigned, the FTSE 100 Index stood at 7,452. A few weeks later it is at 5,932, with billions of pounds being wiped off the value of the 100 largest listed companies. UK economic growth has also unsurprisingly been revised down as a result of the virus outbreak.
The Bank of England made its move just a few hours before the Government did, slashing interest rates from 0.75% to 0.25%, with borrowing costs back down to the lowest level in history. Governor Mark Carney and the policymakers have done so to encourage people to spend in the coming months.
While the Bank of England has used its main monetary policy tool, the UK Government flexed its fiscal muscle by setting policies around spending and taxation in the 2020 budget.
Coronavirus Budget 2020 – Policies
· “Government measures amount to £7bn in support for the self-employed, businesses and vulnerable people.” £5bn emergency response fund for NHS and public services.
· Loans available to help small and medium-sized businesses. Business rates abolished for retail, leisure or hospitality business with a rateable value below £51,000.
· A £500m hardship fund for vulnerable people.
· Statutory sick pay: Available to those advised to self-isolate – even if they haven’t yet presented with symptoms. More help for self-employed or those in gig economy.
· The cost of providing Statutory Sick Pay to any employee off work due to coronavirus will, for up to 14 days, be met by the government in full.
· NHS will get the resources it requires “whatever it needs, whatever it costs”.
Both Mark Carney and Rishi Sunak caveated their forecasts with the potential impact of Coronavirus. What is certain is that there is no certainty in the coming weeks and months. Extraordinary times and extraordinary measures may be set to continue.#Bank of England #Budget 2020 #Coronavirus