Should banks forgo loan interest payments to save the UK's businesses?

Three ways to save the UK economy

Image copyrightGetty ImagesIt has become increasingly clear that businesses are unwilling or unable to take on additional debt during what threatens to be the gravest economic crisis since the 1930s. The government has moved quickly to introduce and then overhaul measures to supply hundreds of billions of pounds in credit to the UK economy. Image copyrightGetty ImagesImage caption Bosses of businesses offering services, like barbers and hairdressers, say they have no idea when cash will start rolling in again Second, demand for credit. Anyone who takes out these loans - whose interest rate the government has not capped - will be 100% liable to pay them back albeit with a 12 month deferral - not holiday. Analysts at stockbrokers AJ Bell estimate the bill for interest on personal and company loans is roughly £28bn every three months. Image copyrightGetty ImagesImage caption Chancellor Rishi Sunak unveiled a raft of measures to help businesses, but will they take them without knowing when they will reopen? Image copyrightGetty ImagesEasyjet paid a dividend of £174m two weeks ago and may now be seeking financial assistance from the government, although it has stressed it wants loans and not a bailout. Some of the other big dividend payers will face understandable public resistance if shareholders are protected only for companies to throw themselves on the mercy of the tax-payer. As I've said before, the government is dealing with a very destructive boulder, gathering momentum down a very steep hill, crushing businesses and whole national economies in its way. But when it comes to an economic outlook that some experts argue is as dire and as significant threat to public health as the virus itself, it's reasonable to ask whether any instrument is too blunt.

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