Sunak expected to announce new furlough scheme around 12:30BST

The front page of every UK newspaper this morning is leading with the story that Rishi Sunak will announce a new furlough scheme which is likely to be more targeted than the first. His announcement is expected in the House around 12:30BST.

• Note that government sources told MNI yesterday that the Budget expected in November has been cancelled and will now likely not take place until March 2021.
• There are few details of what the scheme will look like other than it being potentially targeted more at specific industries. Most commentary suggests it will be similar to the German Kurzarbeit scheme where employers pay the full pay for hours worked by employees and the government pays a percentage of wages for hours that are not worked.
• This scheme is not expected to be cheap (although in comparison to the first furlough scheme it may well be!). Gilt issuance may therefore remain higher than had been previously expected through the rest of the fiscal year.
• Note that after originally supporting the Chancellor's decision not to extend the furlough scheme, Bank of England Governor Bailey sounded more in favour of an industry targeted scheme when he spoke earlier this week.