British chancellor rejects Covid-style handouts for homeowners

UK CHANCELLOR of the Exchequer Jeremy Hunt has rejected Covid-style handouts to help homeowners battling to pay their mortgages and will instead ask banks to do more to help people hold on to their homes, the Sunday Times reported.

Hunt told senior aides that he has ruled out any fiscal intervention, after civil servants proposed measures such as “targeted” and “temporary” mortgage interest rate relief to ease the burden of homeowners, said the report, which cited people it did not identify.

A person close to the chancellor said that high borrowing rates also affected the government, which could not afford to subsidise people in the manner it had with the furlough plan and other measures during the Covid-19 pandemic, the report indicated.

Projections by the UK Treasury showed that every percentage-point increase in the interest rate raises the cost of serving government debt by £25 billion (S$43 billion) a year.

The Bank of England is scheduled to next meet to set rates on Jun 22. BLOOMBERG