Britain has announced extra coronavirus jobs support, offering to pay up to two-thirds of staff monthly wages to firms forced to close over the winter months, as infection rates spiral.
Finance minister Rishi Sunak said the scheme, launched two weeks ago for workers taking reduced hours, will now also provide a "safety net for businesses across the UK who are required to temporarily close their doors" on a local or national basis in an attempt to cut transmission rates.
In a move likely to cost billions of pounds over the six-month duration of the new scheme, Mr Sunak said the government would pay up to two-thirds of employees' salaries, capped at £2,100 a month each, if they work for companies that are forced to close temporarily.
A resurgence of the pandemic has forced Prime Minister Boris Johnson to consider new containment measures and is threatening to derail an economic recovery that was already starting to wane.
Data published earlier today showed growth in August was much weaker than expected.
Mr Sunak, whose emergency spending measures were already on course to cost about £200 billion and push the budget deficit to its highest since World War II, had resisted calls to increase the generosity of his wage support schemes.
His announcement is likely to herald the temporary closure of bars and other businesses. There are around 2.5 million jobs in the hospitality sector.
Pubs across England, Wales and Scotland were forced to close early from last month.
Scotland's government has since ordered a 16-day closure of pubs in the country's two biggest cities, starting on today.
"I hope that this provides reassurance and a safety net for people and businesses in advance of what may be a difficult winter," Mr Sunak said.
Hospitality companies are likely to be among the heaviest users of the expanded support.
A Treasury source told Reuters that the new wage support measures, which will last for six months from 1 November, were likely to cost hundreds of millions of pounds a month.
Under the scheme, employers will not be required to contribute towards wages and only asked to cover social security and pension contributions.
The move to expand the Job Support Scheme - itself announced only two weeks ago - means furlough-type help will remain available to companies hit by lockdowns after Mr Sunak's flagship, economy-wide furlough programme closes at the end of this month.
It comes as the average daily number of Covid-19 cases in England has doubled in a week, an infection survey by the Office for National Statistics (ONS), feeding concern that the epidemic is once again growing exponentially.
Mr Johnson is seeking to tackle a second wave of Covid-19 with local measures in an effort to avoid another national lockdown.
But the ONS estimate said new cases of Covid-19 in England were around 17,200 per day in the latest week to 1 October, compared to 8,400 per day in the previous week.
The daily breakdown of the ONS figures showed that on 1 October, estimated daily cases had risen to 21,300.
The ONS looks to estimate infection numbers in the community beyond those who have been tested, giving an estimate of prevalence that is unaffected by testing capacity.
An estimated 224,400 people in England had Covid-19 in the latest week, or 1 in 240 people, a 92% increase in infections compared to the previous week.
It highlighted areas such as the north-east, north-west and Yorkshire as suffering the highest rates of infections.
