Bank of England has called for the government to "stop and rethink" the furlough scheme.
The Governor of the Bank of England is calling for a review of the Job Retention Scheme, amid new coronavirus measures that could be in place for six months.
Andrew Bailey, the Governor of the Bank of England, told a British Chambers of Commerce webinar on Tuesday 22 September that the Government’s furlough scheme will need a rethink before it ends at the end of October.
There are fears unemployment could spike when the furlough scheme ends, as firms struggle to retain workers.
He said Chancellor Rishi Sunak faces a difficult decision over the scheme and hinted that it may need to become sector-specific.
Mr Bailey noted that at the peak of the crisis, about 30% of private sector employers were using the furlough scheme, but it was now used most heavily by industries such as hospitality, retail and culture.
"I think it is therefore sensible to stop and rethink the approach going forward, without any commitment to what that might be."
And Mr Bailey's comments were made just hours before the Prime Minister Boris Johnson took to his feet in the Commons to reinstate guidance that office workers stay at home and confirm that pubs and restaurants will be forced to close at 22:00 from Thursday 24 September.
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," it said.
Mr Bailey's comments echo the opinion of Labour leader Sir Keir Starmer, who has called on the government not to remove all support in one go.
Posted on Sep 21, 2020.
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