UK to spend $38bn on restaurant discounts

UNITED Kingdom Finance minister Rishi Sunak has unveiled another £30 billion (US$37,6 billion) coronavirus stimulus package aimed at stemming Britain’s growing jobs crisis and lifting the economy out of its worst slump in centuries.
Speaking in parliament on Wednesday, Sunak said that significant job losses are the most “urgent challenge” the UK economy faces, as he announced a package of tax breaks, restaurant discounts and jobs programs designed to bolster employment as the government prepares to withdraw wage subsidies in October.
The coronavirus pandemic has plunged Britain into its worst recession in 300 years, with the economy on track to shrink by 14 percent this year, according to the Bank of England. It also has fewer than six months to sign a new trade deal with the European Union, its biggest export market.

The spending announced Wednesday brings the government’s stimulus layouts to roughly £166 billion ($208 billion), or 7,4 percent of 2019 GDP, according to Paul Dales, chief UK economist at Capital Economics.
While he doesn’t expect economic output to fully recover until early 2022, Dales said the scale of direct fiscal support injected into the economy by the UK government now rivals that of Germany (7,3 percent of 2019 GDP), Japan (7,5 percent) and the United States (8,4 percent), and surpasses government support in France and Italy (both 4,5 percent).
No one can accuse Sunak of “penny pinching,” added Dales.
Businesses will get a £1 000 ($1 255) bonus for each employee they bring back from furlough, costing the government up to £9 billion ($11,3 billion) if employers bring back all 9 million workers enrolled in the wage support program, Sunak said.
The plan also includes a £2 billion ($2,5 billion) program to create and support new jobs for people under the age of 25, who Sunak said are 2,5 times as likely to work in sectors that have been closed by the pandemic. Under the plan, employers will be able to offer government subsidised six-month work placements to young people who are claiming unemployment benefits.
According to the Treasury, a quarter of a million more people under 25 have claimed unemployment benefits since March.
The United Kingdom faces a growing jobs crisis. Major companies have already announced over 80 000 job cuts with more expected when the jobs retention program — which currently supports nearly 30percent of the employed — is wound down in October.
Jobless claims reached 2,8 million in May, more than double the number in March, according to the Office for National Statistics.
The unemployment rate has so far remained low, but it could soar to nearly 15 percent in the fourth quarter if there is a second coronavirus outbreak, according to the Organisation for Economic Cooperation and Development. Even without an additional outbreak, the jobless rate is expected to be nearly 10 percent at year end, the Paris-based agency said earlier this month. — CNN