The Bank of England said U.K. banks must go on with supporting households and businesses, as the economy recovers from the Covid-19 pandemic.
Bank of England Governor, Andrew Bailey, said in a statement; Households and businesses are likely to need prolonged backing from the financial system, as the economy recovers. The government’s relief measures will unfold over the coming months.” Bailey said in a statement.
He appreciated the instant rollout of the UK’s vaccination program. That had led to the advancement of the economic prospect in recent months.
Bank Of England survey report:
The BOE’s Financial Policy Committee, which surveys risks to financial stability, said; corporate debts have risen, especially among small and midsize corporations. The firms wiped government-backed loans to support themselves through lockdowns.
As Britain closed down much of its economy for the first time in March 2020. The BoE told lenders to suspend dividends, and share buy-backs until the end of 2020.
Moreover, the bank also recommended dismissing bonuses for senior staff.
Recently, The Bank of England tossed out its pandemic-enforced restrictions on dividends paid by HSBC, Barclays, and other top lenders with immediate effect on Tuesday, saying; its stress examinations showed they could survive the aftermath from COVID on the economy.
The Bank’s provisional results of its “stress test” of the UK banking sector surmised; there are enough funds to tolerate massive losses of £90bn. Even as a consequence of a steep pandemic recession.
The Bank of England said the banking sector was prepared to aid supporting businesses and households through the recovery.
In general, there had been a slight increase in levels of debt in companies and households – 11.8% of small and medium enterprises are in arrears or defaulters.
Small businesses, in particular, have seen indebtedness, rose by 25% during 2020 and 8% by transport companies.
The UK is set on its roadmap to freedom day but cases are soaring and the challenges in the market persist.
The government is continuing to support the economic comeback, with the furlough scheme in place until September. And, policies like Restart helping people who have sadly lost their jobs to get back into work.