British finance minister Rishi Sunak was forced to offer billions of pounds more of financial help today to businesses grappling with a resurgent Covid-19 pandemic.
The pandemic looks increasingly likely to derail any UK economic recovery.
Rishi Sunak told parliament that the UK government would shoulder more of the burden for paying wages of staff who return part-time to struggling businesses, and would offer more money to hospitality companies and the self-employed.
The move, Sunak's third major announcement in the space of a month, marks a further turnaround after he resisted calls to make government support schemes more generous.
Opponents, policy analysts and some businesses said it was obvious that more help would be needed, and that it should have come sooner.
Britain is now seeing a second wave of the virus and recording 26,688 new cases yesterday.
"I've always said that we must be ready to adapt our financial support as the situation evolves, and that is what we are doing today. These changes mean that our support will reach many more people and protect many more jobs," Sunak said.
He told parliament the UK economy was under "enormous strain" and that more jobs would still be lost.
Over the next six months Covid job support measures and grants to the self-employed and hospitality industry could cost around £13 billion in total, with the enhanced job support scheme accounting for about half the cost.
UK government borrowing in the first half of the financial year is already more than six times higher than before the Covid pandemic at £209 billion.
Some sectors are now in dire straits. An official survey published earlier today showed more than a third of hospitality companies say they are at risk of going bust.
Sunak said he would offer a new grant aimed at hospitality businesses in areas worst affected by the resurgence in infections which will be worth up to £2,100 a month and can be claimed retrospectively to August.
Kate Nicholls, head of the UK Hospitality trade body, said it was a "huge and very welcome" intervention. "Just saved hundreds of thousands of jobs in hospitality and supply chain," she said on Twitter.
The body had previously warned that more than half a million jobs were under threat.
Sunak also changed the forthcoming Job Support Scheme, which is designed to dissuade businesses from making people redundant after the furlough scheme shuts at the end of this month and instead keep workers on reduced hours.
Businesses will now only have to pay 5% of the cost of wages for unworked hours, compared with 33% previously. Staff will also only need to be employed for one day a week, down from a third of their usual hours, further cutting the cost to employers.
Sunak also doubled the grants for self-employed people from 20% to 40% of their previous incomes.
The head of the UK's Resolution Foundation think-tank, Torsten Bell, said Sunak had done the right thing, but that the delay had been damaging.
"Doing it earlier, given the obvious flaws, would have saved more jobs, but at least we've got to the right place 10 days ahead of the Job Support Scheme coming into effect," Bell said.