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Inflation concern

Biden success as House backs $1.9trn rescue plan

Joe Biden

Joe Biden: Covid battle

A $1.9 trillion relief package to fight the impact of the coronavirus was passed by the US House of Representatives early this morning, giving President Joe Biden his first legislative success.

However, there is some concern that the recovery package could cause the economy to overheat and drive up inflation which has prompted falls in stock markets. The FTSE 100 suffered its biggest one-day fall since October, falling 169 points (2.5%) to 6,483.

US consumer spending increased by the most in seven months in January but Federal Reserve chairman Jerome Powell has played down the inflation fears which may help calm markets next week.

The US rescue plan – on top of a package worth nearly $900 billion approved in late December – will pay for vaccines and medical supplies and provide emergency financial aid to households, small businesses and state and local governments.

The pandemic has killed more than 500,000 Americans and thrown millions out of work.

Democrats, who hold a narrow 221-211 majority in the chamber,  aim to get the bill signed by Mr Biden before mid-March.

The bill moves to the Senate, where Democratic Vice President Kamala Harris may have to cast a tie-breaking vote in a chamber which has an even split of seats.

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