Bank of England counts the cost of COVID-19
At the beginning of October, the Bank of England published its summary of the UK’s economic situation in the face of the public health crisis. With many households and businesses under considerable strain as a consequence of lockdown restrictions, the BoE’s findings are reasonably optimistic nevertheless.
Since the global financial crisis in 2008, the UK’s central bank says it has taken actions to strengthen the UK financial system. Consequently, it is confident that ‘UK banks are strong enough to keep supporting households and businesses through this difficult period’.
According to tests undertaken by the BoE of the major UK banks in August, the banking system was shown to be strong enough to keep lending to UK households and businesses, even in the face of severe economic difficulties. This is reported to be due to the big buffers of capital banks are able to use to keep lending, even while weathering losses.
Since the start of the Covid-19 shock, UK businesses have raised over £75 billion of net additional financing from banks and financial markets ― in large part through government-backed loan guarantee schemes.
This has helped many businesses to keep paying wages and their suppliers, even if they face serious cash flow problems. More than 1.8 million mortgage holders have benefited from a payment holiday so that debt-servicing pressures have remained low even as incomes have been under strain.
Looking towards the end of the Brexit transition period
According to the BoE, most risks to UK financial stability that could arise from disruption to cross-border financial services. However, the bank feels these risks have already been mitigated, even if the transition period ends without the UK and EU agreeing on further arrangements for financial services. This reflects extensive preparations made by authorities and the private sector since the Brexit referendum in 2016.
Banks and other financial institutions have made further preparations for the end of the transition period, and the BoE says ‘it is important that they continue to do so to minimise the risk of disruption’.
The Bank says it is ‘working with international partners to strengthen financial markets so they can support the economy better, even under stress’.
Central bank interventions were necessary to stabilise financial markets after an abrupt and disruptive ‘dash for cash’ in March. Although markets have continued to function well since, further episodes of market disruption are possible.
The underlying weaknesses that caused problems in March have not yet been addressed and the UK is working with other central banks and regulators to ensure financial markets can continue to serve the economy under a range of economic scenarios.
Accumulate continues to successfully navigate through crisis
From the beginning of the coronavirus crisis back in March, Accumulate has taken all measures necessary to ensure our operation continues whilst observing the government’s regulations. Our strong response to the pandemic has allowed us to stick to our timescales, with no delays impeding completion at our development sites.
Construction is a particularly difficult industry to introduce social distancing to, particularly on a development site. That said Accumulate has introduced measures such as shift systems and remote meetings to allow work to continue with maximum safety precautions.
Perhaps the most important measure we have taken is to introduce COVID-19 testing for all our on-site personnel. This is the most efficient way of allowing us to progress our developments, which also provides peace of mind to our on-site workers that their families are kept safe.
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