Banks have now lent out £49.4bn through the three main government-backed loan schemes, according to Treasury data released today.
Banks have given out £33.7bn through the bounce back loan scheme (BBLS) up until the week ending 26 July.
The programme sees the government guarantee 100 per cent of bank loans worth up to £50,000 to small businesses.
The coronavirus business interruption loan scheme (CBILS) has now seen banks lend out £12.7bn to small and medium-sized companies. The scheme has an 80 per cent government guarantee and loans can be up to £5m.
However, the CBILS scheme still has only around a 50 per cent approval rate for SMEs who apply.
Lenders have given out £3.1bn through the coronavirus large business interruption loan scheme (CLBILS) for bigger companies. It too has an 80 per cent guarantee on loans up to £200m.
As the UK government gradually reopens the economy after lockdown, it is winding down its support schemes.
The job retention scheme is due to end on 31 October. From August, firms will have to pay national insurance and pension contributions for employees.
The percentage of the wages the government pays will be gradually reduced and employers required to make up the difference.
A wave of unemployment is likely to come as the scheme is wound down, the UK’s budget watchdog and many economists have warned.
The Office for Budget Responsibility’s (OBR) “central scenario” has unemployment jumping to 8.8 per cent from 3.9 per cent. That would put 3m people out of work.
Government pays out £32bn through job retention scheme
The government has now paid £32bn worth of workers’ wages through the job retention scheme that is at the heart of the UK’s economic response to coronavirus.
The latest figures show that 1.2m companies had “furloughed” 9.5m workers by the week ending 26 July. The number has been roughly steady since the start of July, when new additions to the scheme were limited.
In total so far, the scheme has cost the government £31.7bn, HMRC figures showed today.
Under the job retention scheme, the state pays 80 per cent of the wages of workers – up to £2,500 a month – who may otherwise have been laid off.
It has been praised by international organisations and stopped the UK’s unemployment rate surging as it had done in countries such as the US. But the government is gradually winding down the scheme, and economists warn there will be mass job losses.