The Bank of England expects 5million people to be placed on furlough this month – and millions more by the Spring.
However, take up is unlikely to reach the peak of last Spring when 9million workers were on the wages support scheme.
BoE Deputy Governor Ben Broadbent said: “We think that there will again be many millions of employees placed on furlough… in November, and over the following few months.”
He added: “Probably not as many as in phase one because of the change in the nature and the duration of the lockdown.
“But we think probably in November, more than 5 million will be in.”
On Thursday, Chancellor Rishi Sunak extended the costly wages support scheme till next March.
Workers at firms forced to shut due to Covid-19 rule will continue to receive 80 per cent of their wages up to £2,500 a month.
The extension, which came as the UK entered a second lockdown, is expected to cost around £1 billion a month for every 1 million people using it, meaning the total bill could run to tens of billions.
Broadbent was speaking at a presentation organised by regional agents of the central bank, which are regarded as its “early warning” system for economic trends.
His comments after the Bank pumped another £150billion into the economy via its programme of quantitative easing, a type of stimulus which is likened to print money.
Economists say the Bank may have to go for negative interest rates next year.
But yesterday Broadbent said that policymakers had to consider whether negative interest rates might have counterproductive effects during times of stress on banks’ balance sheets.
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