UK furlough scheme will be extended from April to September in budget – FT

Anil Panchal FXStreet

As per the latest news from the Financial Times (FT), the UK’s Chancellor of Exchequer Rishi Sunak is up for extending the furlough scheme from April-end to September, giving £20 billion extensions to the UK Covid-19 support, during today’s budget announcement.

Mr. Sunak is also expected to roll out a £20-a-week uplift to universal credit to help the self-employed.

Further details from expected moves by Mr. Sunak and Company are, per FT, “Combined with an extension of the business rates holiday, a £5bn grants scheme for the high street and other measures, Sunak’s new Covid support package — intended to ‘cushion’ businesses and workers as the economy starts to reopen — will be well in excess of £20 billion.”

Additional details

Under the extended furlough scheme, the government will continue to pay 80 percent of wages up to a cap of £2,500 a month for hours the employee does not work until the end of June.

The Treasury hopes to keep unemployment well below the 7.5 percent peak forecast last November by the Office for Budget Responsibility, enabling the chancellor to say that far fewer jobs had been lost in the Covid-19 crisis than in the global financial crisis of 2008-09.

The total taxpayer cost of additional support measures in 2021-22 is likely to be well in excess of £20bn on top of extra money going to the NHS and schools and other departments this year.

GBP/USD stays positive…

Following the news, GBP/USD holds onto Tuesday’s recovery gains from a two-week low of 1.3859 to currently around 1.3960. However, cautious sentiment ahead of the actual announcement seems to challenge the cable bulls.

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Anil Panchal

FXStreet

Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.

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