Coronavirus: UK government to deliver £2.2bn to local authorities on 13 November to help businesses

Lianna Brinded
·Head of Yahoo Finance UK
·4-min read
Alok Sharma
UK business secretary Alok Sharma. Photo: PA Video via Getty Images

Britain’s business secretary Alok Sharma kicked off Thursday’s UK government coronavirus press conference by re-emphasising Whitehall’s measures to keep the economy afloat.

He announced that the government will be “distributing £2.2bn ($2.9bn) to local authorities tomorrow [13 November] to allow them to make vital grant payments to businesses affected.”

“These measures are designed to help businesses stay afloat,” he added.

READ MORE: FCA boss: 'Significant' number of companies will fail due to COVID

On Thursday, the CEO of UK regulator Financial Conduct Authority (FCA) warned that a “significant” number of companies are likely to fail in the coming months as a result of the COVID-19 crisis.

In his first major speech since taking the top job at the start of October, FCA’s Nikhil Rathi said companies regulated by the watchdog were likely to fold in the coming months.

“Ultimately, we can’t intervene to stop firms from failing in the face of economic distress and sadly we do expect a significant number of regulated firms, particularly smaller firms, to fail in the months ahead,” Rathi said in a speech at the City of London’s annual Mansion House gathering on Thursday evening.

The number of companies going bust across the UK economy has so far been kept artificially low by extensive government support. The government has so far spent £200bn supporting jobs and companies in the UK.

He also highlighted the UK government’s Kickstart jobs scheme, which has created 19,000 jobs for out-of-work young people since its launch at the start of September.

It is “a ray of hope for young people” he said.

“I know how hard the job market is,” said Sharma and encouraged as many young people as possible to join the scheme.

At the press conference, Sharma also updated the nation on the latest data around coronavirus cases. The UK has recorded a further 33,470 coronavirus cases — an increase of more than 10,000 (or 46%) on the total for Wednesday and a new record high.

The average number of COVID-19 patients in hospital is 14,196 across the UK, compared to 12,406 a week ago.

WATCH: Coronavirus: 'Zombie company' warning as 557,000 firms endure significant distress

Sharma’s comments come on the day of major updates about the UK economy.

According to data published by the Office for National Statistics (ONS), the UK economy grew by a record 15.5% between July and September, bouncing back out of a recession and showing a partial recovery.

However, this was before large parts of the UK entered a second lockdown, which is due to last until 2 December. It also missed estimates from economists which had expected third quarter GDP to grow by 15.8%.

Sharma on Thursday reinforced the message that the lockdown will end on 2 December and prime minister Boris Johnson will announce in advance what will happen next.

Meanwhile, UK unemployment rose at its fastest pace in more than a decade, with redundancies surging to a record high between July and September. Britain lost 782,000 jobs on employer payrolls between March and October, 33,000 higher than the previous month’s figures.

READ MORE: UK economy rebounded by 15.5% prior to COVID-19 second wave

However, the UK — as well as other economies — have been given fresh hope within recent days about a potential coronavirus vaccine.

Germany’s BioNTech (BNTX) and its partner Pfizer’s (PFE) potential coronavirus vaccine could start to be rolled out in the UK by Christmas if it passes further scientific and safety “hurdles,” according to the UK government.

READ MORE: CureVac CEO talks Tesla tie-up and Q3 2021 COVID-19 vaccine approval

UK stocks had soared on Monday as hopes grew of an economic resurgence from the pandemic, with investors betting on the suppression of the virus and revival in ailing companies’ fortunes.

On Thursday, the boss of Germany’s other leading vaccine developer CureVac (CVAC) said in a conversation with Yahoo Finance UK that he eyes third quarter 2021 approval for CureVac’s vaccine.

WATCH: BioNTech founder says first UK patients could get jab next month