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UPDATE 2-UK's Sunak to face parliament as lockdown pressure mounts

Wed, 21st Oct 2020 16:57

(Adds Guardian, FT reports)

LONDON, Oct 21 (Reuters) - British finance minister Rishi
Sunak will address parliament on Thursday about the outlook for
the economy, as he faces growing pressure to offer more support
to businesses and workers hit by tightening COVID lockdown
rules.

Britain's main furlough programme ends this month, despite a
resurgence in coronavirus cases that has led to a wave of
restrictions that have fallen especially heavily on the
hospitality industry.

Without extra support, unemployment is forecast to rise by
more than 1 million before the end of the year.

From next month, only businesses that are legally required
to close completely to the public will be able to furlough
employees. Those employees will receive two-thirds of their
wages, rather than a previous 80%.

Others employing staff part-time will receive much more
limited support for their wage bills.

Sunak is expected to unveil additional measures to help
struggling firms with one possibility being to extend the
eligibility for business grants, The Guardian reported on
Wednesday. The Financial Times said there would be more support
for the hospitality sector.

The government has clashed with regional politicians in
northwest England over the scale of aid available to businesses
and workers.

Many lockdown measures in Britain do not require businesses
to close outright but significantly restrict trade, for example
by barring pubs and restaurants from serving groups of people
who do not live in the same household, or opening after 10 p.m.

Britain's finance ministry was not immediately able to
comment on the nature of the upcoming 'Economy Update' which the
government announced on Wednesday.

Previous updates have come alongside the announcement of
more generous support.

Facing demands for more assistance from lawmakers on
Tuesday, junior finance minister Jesse Norman said the
government had put in place "an evolving and comprehensive
programme of support for business".

British government borrowing is on course to reach its
highest since World War Two this financial year.

Sunak said earlier on Wednesday that supporting jobs
remained the government's priority, but he would need to take
steps to ensure the public finances remained sustainable once
economic recovery was under way.
(Reporting by Michael Holden, writing by David Milliken and
William James, editing by Paul Sandle and Stephen Addison)

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