Lord King, who was the Governor of the Bank of England during the financial crisis, said Britain is in a good position to take on large debts despite 10 years of austerity.
“I don’t think we should worry today about the extent to which the national debt will increase, as long as we can get the economy going as soon as possible. “
He added that “trial and error” would be required to break the lockout.
He also underscored the importance of government being transparent in a difficult time for businesses around the world.
The roundtable colleague said the government should be “honest about the difficulties” in opening up the UK to business.
He also said that the reopening of schools and some businesses should be considered to help boost the economy.
He said, “I don’t think it makes sense to just tell everyone to stay inside. “
The former Governor of the Bank of England previously said at a policy exchange webinar that he was surprised at the number of bank branches closed.
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However, by suppressing activity, companies are inevitably affected.
The Chancellor previously announced a series of measures to ensure that businesses do not go bankrupt as a result of the pandemic.
These measures are also in place to compensate employers and employees in the event of loss of income.
Rishi Sunak announced £ 330 billion in state-supported loans and promised around £ 40 billion in grants, tax breaks and wage subsidies.
However, Mervyn King is not convinced that the systems are working as intended.
He called on the banks to give “clear instructions” to their staff and to ensure that businesses can enter their local branches.
Explaining the importance of opening branches, he compared them to supermarkets to emphasize their essentiality.
Lord King described the banks as “part of the emergency system essential to maintain the economy.”
He said that – like supermarkets – branches should be opened.
He believes that the government’s business interruption loan program against coronaviruses (CBILS) has design flaws that need to be corrected by the government.
He previously told ITV News that personal guarantees are useless.
Lord King said banks should expand their assistance under the CBILS program “interest-free and arrangement-free”.