Airlines, a bakery and a football club claim BoE coronavirus cash
Famous UK and foreign firms from across the economy have turned to the Bank of England for coronavirus loans, official figures have shown, with companies from John Lewis to football club Tottenham Hotspur selling the bank their bonds.
German chemicals company BASF is currently the biggest borrower on the Bank’s covid corporate financing facility (CCFF), official figures have shown, with £1bn outstanding.
Among the other biggest users of the scheme have been Chanel, Easyjet and Intercontinental Hotels, which each currently owe £600m.
Perhaps the most unlikely recipient of Bank of England cash was Tottenham Hotspur, which borrowed £175m through the CCFF.
Under the CCFF, the Bank of England creates money and lends it directly to large companies by buying their short-term bonds.
To gain access to the scheme, firms have to have significant revenues in the UK and be sizeable employers.
Some of the other big names using scheme were German chemicals firm Bayer, JCB, Nissan, services group Rentokil, Ryanair, shopping centre group Westfield, and food services firm Compass. They each currently have £600m outstanding.
High-street stalwarts John Lewis and Marks and Spencer both sold the Bank debt worth around £300m. Sausage roll specialist Greggs borrowed £150m.
Bank supports under-pressure firms
The Bank has lent out more than £16bn through the scheme to some of the biggest companies that operate in the UK. The CCFF is part of its unprecedented interventions in the economy amid the coronaviru crisis.
The Bank of England announced in May that in the interest of transparency it would make public which firms were using its borrowing facility.
Firms have faced unprecedented pressure this year. Coronavirus lockdowns have caused global demand to evaporate and severely disrupted supply chains. Huge numbers of firms have turned to government support of one kind or another.
Some firms that have borrowed money from the Bank through the CCFF have announced steep job cuts. Easyjet said last month it plans to slash 30 per cent of its workforce, about 4,500 jobs. Ryanair has said it plans to cut around 3,000 jobs.
The Bank of England slashed interest rates to 0.1 per cent, their lowest ever level, in March as it sought to bolster the economy and calm financial markets.
It also ramped up bond-buying by £200bn to backstop the crucial bond market and ease the strain on the government as it borrows record amounts.
In recent weeks, traders have hotly debated whether the Bank will slash interest rates into negative territory. The Bank itself has began to more readily discuss the idea, with governor Andrew Bailey saying negative rates are under review for the first time.