Coronavirus: UK govt offers £330bn in guaranteed loans

Sunak, who only took over at the Treasury last month, said any business that needed to borrow would be able to access "credit on attractive terms", from next week, although terms were not disclosed. The money would be offered via the Bank of England for large firms, while smaller enterprises could apply for business interruption loans of up to £5m each.

A separate rescue scheme for the airline industry, which has been devastated by the crisis, would be announced in the coming days, Sunak told a news conference in Downing Street.

The news came a day after French President Emmanuel Macron raised the bar on government intervention by announcing up to €300bn of guarantees for loans to business and pledged no company would go bust because of the coronavirus.

Lenders would also offer a three-month mortgage holiday for those in difficulty, Sunak added as he unveiled a raft of fresh measures aimed at preventing a widespread business collapse. The 12 month business rates holiday announced in last week's Budget would be extended to all firms in the retail, leisure and hospitality sectors and funding grants of up to £25,000 for smaller businesses would be made available.

"That means any business who needs access to cash to pay their rent, their salaries, suppliers or purchase stock will be able to access a government-backed loan or credit on attractive terms. And if demand is greater than the initial £330bn I'm making available today, I will go further and provide as much capacity as required. I said whatever it takes, and I meant it,."

"Some sectors are facing particularly acute challenges. In the coming days, my colleague the Secretary of State for Transport and I will discuss a potential support package specifically for airlines and airports," Sunak told reporters.

The government has been bombarded with criticism and warnings from business groups about its call for people to avoid pubs, restaurants and other public venues.

The pub industry said it could be wiped out within days without help as cinemas closed across the country. Retailers also warned plunging footfall could send companies to the wall. Airlines and airports have said they are on the verge of going bust as passenger numbers and flights plunge.

After telling people to carry on more or less as normal last week Prime Minister Boris Johnson changed course abruptly on Monday evening by announcing a virtual lockdown on much economic activity. But the hospitality and leisure industries, which rely on consumers going out to spend money, have warned they face wipeout without state support.

Earlier on Tuesday, leaders of the government's budget watchdog gave Sunak the green light to turn on the spending taps at an evidence session with MPs on the Treasury select committee.

Robert Chote, head of the Office for Budget Responsibility, said he should "spray water" at businesses and worry about the public finances later. He said the Treasury should go on a wartime footing and be prepared to tolerate budget deficits of 20% of GDP as the UK did during the second world war. Net borrowing was just 1.9% of GDP in 2019.

Meeting these demands will require Sunak to throw out the economic manual the Conservative party has stuck to for the past 10 years of cuts to public spending in the name of "fiscal discipline". Some Tory MPs expressed concern at the spending plans announced in last week's budget, which featured £7bn of support for businesses and workers.

(Additional reporting by Sean Farrell)