Today, the British administration has announced the offering of an additional 4.6 billion pound stimulus package to help the business sector. This support package is present to reduce the economic downturn that is expected to increase due to the surge in the Covid-19 case and the third curfew.
Prime Minister Boris Johnson announced a 'lockdown' on Monday, saying the spread of the Covid-19 pandemic was expected to continue to increase and was at high risk. On that basis, the government has encouraged people to work from home and schools are ordered to close. Not only that, the government also ordered the hotel and non-major business sector to close.
Some analysts believe that the British economy is expected to experience a recession phase in the last quarter of 2020 and the first quarter of 2021. Indications for early 2020 show that UK economic output has declined by 25% in the first two months of 'lockdown' in 2020.
However, the new decline is expected to be much smaller as most businesses have been able to adapt to work remotely or from home. The announcement of the stimulus package today allows the retail, hospitality and leisure sectors to receive assistance of up to 9,000 pounds.
Britain has experienced the worst contraction in Group 7 (G7) economies in the second quarter of 2020 and the Organization for Economic Co-operation and Development has estimated Britain's recovery by the end of this year will be slower than that of member countries after Argentina.
GBP strengthened by 0.14% against the US dollar as of 9.10 p.m.
