HM TREASURY PREPARING NEW GOVERNMENT-BACKED LOAN SCHEME

The Financial Times (£, p1) and Daily Mail (p8) report that HM Treasury is planning to launch a permanent replacement for the coronavirus business support lending schemes, with new government-backed guarantees to support lending to a broad range of small to medium-sized businesses.

The new scheme will reportedly enable businesses that are deemed viable but are otherwise unable to obtain finance to borrow up to £10 million, with the loans subject to a government guarantee of as much as 80 per cent.  Interest rates on loans extended under the scheme are likely to be capped at 15 per cent, but lenders will have discretion below that limit. Meanwhile, the eligibility criteria and checks on prospective borrowers? creditworthiness are expected to be more rigorous than those for borrowing under the Bounce Back Loan scheme. Since the onset of the pandemic, lenders have approved loans worth a total of £65 billion to 1.5 million businesses under the government's coronavirus business support lending programme.

BREXIT NEGOTIATIONS EXTENDED BUT DIFFERENCES PERSIST

The prime minister and the president of the European Commission yesterday agreed to continue negotiations for a free trade agreement between the UK and EU, despite what they described, in a joint statement, as ?exhaustion after almost a year of negotiations?, and seemingly intractable differences between the two parties on key issues including ?level playing-field? provisions and fishing rights (Financial Times, £, p1).

The leaders did not specify for how much longer the talks would continue, but failure to agree and ratify a deal by 31 December would see the EU and UK trade on World Trade Organisation (WTO) terms from 1 January. The prime minister deemed this the most likely outcome, despite the extension of negotiations, saying: ?I've got to repeat the most likely thing now is of course that we have to get ready for WTO terms (BBC News, online only).?

NEWS IN BRIEF

Eurozone leaders have called for renewed urgency in the European Commission's ongoing work to integrate the bloc's banking markets, in a joint statement issued after Friday's meeting of eurozone finance ministers (Politico, online only).

In a report published today, the House of Lords Economic Affairs Committee has urged the government to shift spending away from wage subsidies, towards creating new jobs, to prevent a spike in unemployment next year (Daily Telegraph, £, B3).

The Financial Times (£, p2) reports that the City of London Corporation is planning a ?return to work week? in April 2021, to encourage employers and employees to return to their offices in the Square Mile.

House prices will rise by four per cent in 2021 according to the property portal Rightmove, in its latest monthly survey of housing market participants (The Times, £, p41).

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