UK offers $6.2 billion support package to firms affected by new COVID-19 recession

In light of an expected new economic recession triggered by a surge in COVID-19 infections resulting in a third nationwide lockdown, the British government offered on Tuesday a 4.6 billion pound ($6.2 billion) support package for businesses.

The third national lockdown was announced by Prime Minister Boris Johnson on Monday, citing the highly contagious new coronavirus variant risked overwhelming the health service within 21 days.

U.K.’s economy is tipped to fall under recession again, with the last quarter of 2020 and the first quarter of 2021 contracting. This followed a 25% drop in output in the first two months of lockdown in 2020.

With the new support package, retail, hospitality, and leisure companies will be able to claim one-off grants worth up to 9,000 pounds to get them through the coming months, costing up to 4 billion pounds in total, along with 600 million pounds of grants for other businesses.

Meanwhile, J.P. Morgan economists forecast a 2.5% fall in output for the first quarter of 2021.