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Sunak to face parliament as lockdown pressure mounts

LONDON (Reuters) - British finance minister Rishi Sunak will address parliament on Thursday about the outlook for the economy, as he faces growing pressure to offer more support to businesses and workers hit by tightening COVID lockdown rules.

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Britain’s main furlough programme ends this month, despite a resurgence in coronavirus cases that has led to a wave of restrictions that have fallen especially heavily on the hospitality industry.

Without extra support, unemployment is forecast to rise by more than 1 million before the end of the year.

From next month, only businesses that are legally required to close completely to the public will be able to furlough employees. Those employees will receive two-thirds of their wages, rather than a previous 80%.

Others employing staff part-time will receive much more limited support for their wage bills.

Sunak is expected to unveil additional measures to help struggling firms with one possibility being to extend the eligibility for business grants, The Guardian reported on Wednesday. The Financial Times said there would be more support for the hospitality sector.

The government has clashed with regional politicians in northwest England over the scale of aid available to businesses and workers.

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Many lockdown measures in Britain do not require businesses to close outright but significantly restrict trade, for example by barring pubs and restaurants from serving groups of people who do not live in the same household, or opening after 10 p.m.

Britain’s finance ministry was not immediately able to comment on the nature of the upcoming ‘Economy Update’ which the government announced on Wednesday.

Previous updates have come alongside the announcement of more generous support.

Facing demands for more assistance from lawmakers on Tuesday, junior finance minister Jesse Norman said the government had put in place “an evolving and comprehensive programme of support for business”.

British government borrowing is on course to reach its highest since World War Two this financial year.

Sunak said earlier on Wednesday that supporting jobs remained the government’s priority, but he would need to take steps to ensure the public finances remained sustainable once economic recovery was under way.

Reporting by Michael Holden, writing by David Milliken and William James, editing by Paul Sandle and Stephen Addison

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