UK Chancellor hints of job supports when its furlough ends        

Chancellor of the Exchequer Rishi Sunak walks through from the foreign office to Downing Street after the introduction of measures to bring the country out of lockdown.

UK Chancellor of the Exchequer Rishi Sunak gave the strongest hint yet that he’ll support UK jobs after the government’s furlough programme ends next month, meeting a key demand of business lobbies and the opposition Labour Party.

Mr Sunak, speaking in parliament after data showed the economy has shed almost 700,000 jobs during the coronavirus-induced recession, acknowledged that businesses need help. 

He was responding to questions by Treasury Committee Chairman Mel Stride on whether he will provide more assistance beyond the end of October. 

"I hope that he will be reassured that throughout this crisis I have not hesitated to act in creative and effective ways to support jobs and employment and will continue to do so,” Mr Sunak said.

While the finance minister still isn’t planning to extend the furlough programme, he is preparing new measures to help, according to two people familiar with the matter.

The UK stands out among major European economies for refusing to extend the flagship crisis plan, fearing that it would delay an inevitable overhaul of industries struggling to survive the virus. 

At the same time, job cuts announced by major companies and repeated warnings that unemployment is headed to levels unseen since Margaret Thatcher was prime minister in the 1980s are making it difficult for Mr Sunak to avoid taking action.

Morgan Stanley said this month that a targeted approach to vulnerable industries would have a “comparatively modest” net cost of £3bn.

Figures from the UK's Office of National Statistics showed employment fell by 102,000 in July even as the economy reopened. 

The pandemic also finally began filtering through to the unemployment rate -- so far subdued by the furlough programme -- pushing the single-month figure up the most since 2013.

Deputy national statistician Jonathan Athow said the labour market is starting to display characteristics more typical of a recession, with job losses rising and people previously declaring themselves inactive or in unpaid employment now joining the search for work. 

The ONS report showed young people bore the brunt of job losses in the latest three months, with employment among 16-24-year-olds falling by 156,000.

“The critical period is going to be October and the number of people that come off the job retention scheme into jobs and the number that have a job,” said Philip Shaw, chief economist at Investec Bank. “What is difficult is fiscal policy and what is the chancellor going to do.” 

- Bloomberg