MNI POLICY: UK Launches GBP330b Loan Guarantee, BOE CP Scheme

--Sunak Says Will Do Whatever It Takes To Aid Economy

By David Robinson

     LONDON (MNI) - UK Treasury head Rishi Sunak launched support measures to

offset the impact of coronavirus including GBP330b of business loan guarantees,

a program worth 15% of GDP in one of the strongest global responses yet to the

pandemic.

     The BOE will also purchase firms' commercial paper due in up to one year.

Sunak expressed doubts about backing cash handouts to consumers that many

ex-officials have suggested worldwide, saying damage from the virus was not a

simple demand shock.

     The following are key points from the announcement:

     -The Treasury/BOE initiative involves creating a financing facility to buy

commercial of up to one year maturity for non-financial firms that make a

"significant contribution" to the UK economy. The facility will "offer financing

on terms comparable to those prevailing in markets in the period before the

Covid-19 economic shock," the BOE stated. The BOE revealed the scheme will be

fully underwritten by the Treasury and the Bank will just administer it.

-The government backed Business Interruption Loan Scheme will provide loans of

up to GBP5 billion to firms, with no interest due for six months.

     -The GBP330 billion loan scheme, equivalent to 15% of GDP, dwarfs the GBP30

billion support package, equivalent to 1.5% of GDP, contained in last week's

Budget.

     -The measures announced so far are only partial and more would be coming in

the days ahead, Sunak said. The BOE's next policy is March 26.

--MNI London Bureau; tel: +44 203-586-2223; email: david.robinson@marketnews.com

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