Bank of England calls for Chancellor to urgently “rethink” furlough end date

The Governor of the Bank of England is calling for a review the furlough scheme, amid new coronavirus measures that could be in place for six months.

Boss Andrew Bailey said the government must “stop and rethink” the job retentions scheme, which is due to close on October 31.

Speaking on a webinar hosted by the British Chambers of Commerce, Bailey echoed Sir Keir Starmer’s calls for more targeted support.

“We have moved from a world of generalised employment protections, to specific and focussed areas,” he said.

An estimated 3million workers are still on furlough but the Governor said that higher use of the scheme in sectors such as hospitality, retail and culture most affected by social distancing meant it was sensible to “stop and rethink”.

“Furlough has been successful and I congratulate the chancellor,” Bailey said.

“It would be completely inappropriate of me to do anything to tie the chancellor’s hands, it’s a very difficult situation we’re in at the moment and I fully support the decisions that he’s taken.

“It has helped manage the shock, to firms and to labour,” but now, he added “the use of it, as far as we can tell, is more concentrated.”

“I think it is therefore sensible to stop and rethink the approach going forward, without any commitment to what that might be.”

Bailey also struck a downbeat tone on economic prospects, warning that the “hard yards are ahead of us” as economically damaging curfews on bars and restaurants come into force.

He said the measures could be in place for six months, as the coronavirus infection rate remains at over 3,000 new cases a day.

UK Hospitality said the move was “effectively a lockdown” for city centre bars and restaurants.

“This is a huge, huge blow to hospitality and it will be potentially fatal for many businesses,” the trade body said.

Chancellor Rishi Sunak faces a difficult decision over the future of the furlough scheme, which could trigger hundreds of thousands of redundancies in the coming months.

On Tuesday, Whitbread, which owns Premier Inn and Beefeater, announced plans to cut 6,000 staff in October as the scheme comes to a close.

Wetherspoons said it will also slash 450 jobs at airports amid fears it could take years for the sector to bounce back from the pandemic.

Get the latest money advice, news and help straight to your inbox – sign up at

Source Article