By Laurie Laird
LONDON (MaceNews) – The UK government has extended its job support scheme until the end of March, just hours after the Bank of England downgraded its economic forecast for the fourth quarter.
The UK’s top finance official, Chancellor of the Exchequer Rishi Sunak, told parliament that the programme will provide 80% of the wages of workers affected by business closures, replacing a scheme that was less generous to employees. Sunak has repeatedly stressed his disaffection for continued support for jobs that may no longer be viable in post-Covid economy.
The announcement came after the Bank of England expanded its quantitative easing programme at a rate-setting meeting on Wednesday. The Bank’s Monetary Policy Committee announced a bigger-than-expected £150 billion increase in its bond-buying scheme, taking the total package to £875 billion.
BoE economists expect the economy to contract by 2.0% in the fourth quarter, partly reflecting a new national lockdown that came into effect on Thursday. Unemployment could rise to 7.5% by year end, according to minutes of the meeting released earlier on Thursday.
Sunak provided little additional detail about the scheme. UK Prime Minister Boris Johnson is expected to hold a press briefing at 5:00 GMT.
The government has come under heavy criticism for executing a series of U-turns in coronavirus policy. Prime Minister Boris Johnson announced that latest lockdown over the weekend, just days after his ministers denied that such a policy was in the pipeline. Sunak, one of the most popular members of the UK cabinet, attempt to deflect such criticism. “I’ll leave it to the people of this country to decide … whether it’s a good or a bad thing to change economic policy when circumstances” change.