UK finance minister, Rishi Sunak, announces the new jobs support scheme
- As the economy reopens, it is fundamentally wrong to keep furlough scheme
- I cannot save every business, every job
- We need to allow the economy to move forward
- Announces new jobs support scheme
- Government will directly support wages of people in work
- This will help companies employ people on shorter hours, instead of laying them off
- The scheme will support viable jobs
- Employees must work at least a third of normal hours
- Government will increase wages to cover two thirds of lost pay
- The scheme will run for about 6 months
- Self-employed grant will be extended on similar terms as jobs support scheme
- Introduces 'pay-as-you-grow' scheme
- Bounce back loans extended from 6 years to 10 years
- Businesses can choose to make interest-only payments now
- To extended deadline of all loan schemes until the end of the year
As the furlough program comes to an end in October, these are the new measures introduced to try and support the labour market to prevent job losses in the UK.
The jobs support scheme is a bit more generous than expected, with the government covering 2/3 of wages. It was expected that it may have been a 50-50 kind of thing.
In any case, these measures are certainly welcome for the pound and UK assets but how much so can this alleviate the pressure on the economy remains to be seen.
This is definitely better than nothing, but it perhaps is the bare minimum to really ensure that we don't see a cliff-edge collapse in the labour market.
But amid Brexit risks, virus developments, and likelihood of the economic recovery stalling, the pound may only find some short-term relief when all is done and dusted.
