UK unveils $420 billion lifeline for firms hit by coronavirus

UK unveils $420 billion lifeline for firms hit by coronavirus
Britain's Prime Minister Boris Johnson, Chancellor of the Exchequer Rishi Sunak and Chief scientific officer Patrick Vallance arrive for a news conference on the ongoing situation with the coronavirus disease (COVID-19) in London, Britain March 17, 2020. (Reuters)
Updated 18 March 2020

UK unveils $420 billion lifeline for firms hit by coronavirus

UK unveils $420 billion lifeline for firms hit by coronavirus

LONDON: Britain said it would launch a £330 billion ($399 billion) lifeline of loan guarantees and provide a further £20 billion in tax cuts, grants and other help for businesses facing the risk of collapse from the spread of coronavirus.
Finance minister Rishi Sunak repeated his pledge to do “whatever it takes” including further action if needed to help sectors from retailers to bars and airports which are reeling from a near-shutdown of their businesses.
“This is not a time for ideology and orthodoxy,” Sunak said on Tuesday, speaking alongside Prime Minister Boris Johnson. “This is a time to be bold, a time for courage.”
Britain, criticized by some scientists for moving more slowly than other European countries to prevent the spread of the virus, ramped up its response on Monday when it told people to avoid pubs, clubs, restaurants, cinemas and theaters.
The coronavirus death toll in Britain rose by 16 to 71 on Tuesday.
Sunak said he was including all retail, hospitality and leisure businesses in the suspension of a property tax, alongside the new loan guarantee program which was equivalent to 15% of British economic output.
Companies from those sectors would be offered cash grants and the government would discuss a support package for airlines and airports.
Britain’s biggest airports including Heathrow and Gatwick have warned that they face the threat of a complete shutdown without government help.
Banks and lenders would offer a three-month mortgage holiday for people in difficulty, Sunak said.
He later told lawmakers, some of whom criticized the business focus of the plan, that the government would soon make a statement about support for renters.
Sunak described Tuesday’s package of measures as unprecedented, although Britain issued guarantees of around £1 trillion
during the global financial crisis.
The Institute for Fiscal Studies, a think-tank, said Sunak would need to “come back with more” and Allan Monks, a JP Morgan economist, said that excluding the loan guarantees, the size of Britain’s stimulus measures for this year was “likely to look small compared to the economic shock underway.”
The Bank of England said it would set up a new fund with the finance ministry to buy commercial debt with a term of up to one-year issued by investment-grade companies making a “material contribution” to Britain’s economy.
It added that the fund would be financed out of the creation of central bank reserves — in other words with new money, much like the BoE’s quantitative easing program.
Earlier on Tuesday, Britain’s budget forecasters said the scale of the borrowing needed to fight the coronavirus hit to the economy might resemble the country’s immense debt splurge during World War Two.
“Now is not a time to be squeamish about public sector debt,” Robert Chote, head of the Office for Budget Responsibility, told lawmakers.
“We ran during the Second World War budget deficits in excess of 20% of GDP five years on the trot and that was the right thing to do.”
On Monday, French President Emmanuel Macron said his government would guarantee 300 billion euros worth of loans, and promised that no French company would be allowed to collapse.
New Bank of England Governor Andrew Bailey promised “prompt action” on Monday, less than a week after an emergency rate cut by the BoE which took its benchmark rate to just 0.25%.
Investors are watching for another rate cut, possibly before the BoE’s next scheduled announcement on March 26.
The central bank is also expected to expand its £435 billion government bond buying program.


Blow to global vaccine drive as Pfizer delays deliveries

Blow to global vaccine drive as Pfizer delays deliveries
Updated 15 January 2021

Blow to global vaccine drive as Pfizer delays deliveries

Blow to global vaccine drive as Pfizer delays deliveries
  • Pfizer said the modifications at the Puurs factory were necessary in order to ramp up its production capacity from mid-February of the vaccine
  • There will be “a significant increase” in deliveries in late February and March, the US group promised

BERLIN: A global coronavirus vaccine rollout suffered a major blow Friday as Pfizer said it would delay shipments of the jabs in the next three to four weeks due to works at its key plant in Belgium.
Pfizer said the modifications at the Puurs factory were necessary in order to ramp up its production capacity from mid-February of the vaccine developed with Germany’s BioNTech.
There will be “a significant increase” in deliveries in late February and March, the US group promised. The European Commission also confirmed that promised doses for the first quarter will arrive within the period.
But European Union nations, which are desperately waiting for more doses to immunize their populations against the virus that has already claimed almost two million lives worldwide, expressed frustration.
Germany, the EU’s biggest economy, voiced regret over the “last minute and unexpected” delay.
It urged the European Commission — which undertook joint procurement for the bloc — to “seek clarity and certainty” for upcoming shipments.
Six northern EU nations also warned in a letter to the Commission that the “unacceptable” situation “decreases the credibility of the vaccination process.”
The letter signed by ministers from Denmark, Estonia, Finland, Latvia, Lithuania and Sweden further asked the Commission to “demand a public explanation of the situation” from the pharmaceutical companies.
Across the Atlantic, Canada also said it was impacted by the delays, calling it “unfortunate.”
“However, such delays and issues are to be expected when global supply chains are stretched well beyond their limits,” said Canada’s Procurement Minister Anita Anand.
Pfizer/BioNTech’s vaccine, which was developed at record-breaking speed, became the first to be approved for general use by a Western country on December 2 when Britain gave it the go ahead.
After Britain rolled out its immunization drive, the EU followed from December 27.
The latest shipment delay will likely add fuel to anger over the bloc’s vaccination campaign, which has already been criticized for being too slow compared to the United States or former EU member Britain.
The European Commission has also been accused of not securing enough doses early enough.
Just last week, the EU struck a deal to double its supply of the BioNTech/Pfizer vaccine to 600 million doses.
The urgency of immunizing the population has grown over fears of virus variants first seen in South Africa and Britain, which officials warn are more infectious.
But vaccine makers had repeatedly warned that production capacity was limited.
While Pfizer is augmenting capacity at Puurs, its partner BioNTech on Friday secured authorization to begin production at Germany’s Marburg.
The challenges of getting millions of vaccines around the world are also huge as the BioNTech/Pfizer jabs must be stored at ultra-low temperatures of about minus 70 degrees Celsius (-94 Fahrenheit) before being shipped to distribution centers in specially-designed cool boxes filled with dry ice.
Once out of ultra-cold storage, the vaccine must be kept at two Celsius to eight Celsius to remain effective for up to five days.