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UK's Sunak to set out future of jobs furlough scheme on Thursday

The Bank of England forecast last month that Britain's unemployment rate would jump to 7.5% by the end of the year if there were no replacement for the scheme, up from 4.1% in the three months to July. The BBC reported that Sunak would announce more financial help for people and businesses where jobs were at risk, probably through the form of wage subsidies for staff who return part-time, but would not target help at specific sectors.

Reuters | London | Updated: 23-09-2020 22:25 IST | Created: 23-09-2020 22:01 IST
UK's Sunak to set out future of jobs furlough scheme on Thursday
Representative image Image Credit: Twitter(@RishiSunak)

British finance minister Rishi Sunak will set out the future of the country's furlough scheme on Thursday, little more than a month before the 52 billion pound ($66 billion) programme is set to expire. Sunak has ruled out a wholesale extension of the Coronavirus Job Retention Scheme, which supported 8.9 million jobs at its peak in May, but a growing second wave of COVID-19 cases has piled pressure on him to announce a replacement.

"As our response to coronavirus adapts, tomorrow afternoon I will update the House of Commons on our plans to continue protecting jobs through the winter," Sunak said. A finance ministry source said Sunak would not be holding a full budget before the end of the year, as previously planned, due to the economic uncertainty created by rising COVID cases.

The most recent official figures show around 5 million people were still relying on the programme for some or all of their income at the end of July. The Bank of England forecast last month that Britain's unemployment rate would jump to 7.5% by the end of the year if there were no replacement for the scheme, up from 4.1% in the three months to July.

The BBC reported that Sunak would announce more financial help for people and businesses where jobs were at risk, probably through the form of wage subsidies for staff who return part-time, but would not target help at specific sectors. Business leaders, trade unions and the opposition Labour Party have all urged the government to continue support in some form and avoid a cliff-edge end to assistance.

Britain's furlough scheme, which paid up to 80% of employees' wages, is due to expire on Oct. 31, sooner than equivalent programmes in other countries.


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