Sunak set to announce furlough extension - report

The Treasury is likely to extend state support for wages but at a reduced rate of 60%, down from an initial 80%, the Telegraph reported. Pay of workers returning to work part-time may also be topped up as the government tries to wean the UK off furloughing while easing the economic lockdown.

Sunak could announce changes to the furlough plan as early as Monday, the Telegraph said.

Cabinet ministers have started telling companies that the Covid-19 job retention scheme will continue throughout the summer with many businesses staying shut under the government's lockdown. But ministers want to create incentives for employers to start a gradual return to work, the Telegraph said.

Prime Minister Boris Johnson announced the easing of some coronavirus lockdown measures on Sunday night. He said people who could not work from home should return to work on Monday where possible. Limits on exercise and social interaction were also trimmed.

But Johnson said most of the economic shutdown would continue with restrictions lifted gradually. Parts of the hospitality industry will be allowed to reopen in early July, he said. Business groups and unions have criticised the announcement for vagueness.

Sunak opened the furlough scheme on 20 April and it now covers almost a quarter of employees in Britain. Under the plan the government pays 80% of wages up to £2,500 a month for employees laid off temporarily by businesses during the crisis.

The programme is due to finish at the end of June but employer groups have warned the government not to create a cliff edge that would make workers suddenly too costly for businesses, leading to big job cuts. The government said on 4 May that the cost of paying the wages of 6.3m people was £8bn so far.