Sunak said it would "give people across the UK certainty over the winter".

Employees will receive 80% of their usual salary for hours not worked, up to £2,500 a month.

All employers will have to pay for hours not worked is the cost of employer National Insurance and pension contributions. 

There will be a review in January to decide whether to ask employers to contribute more.

While the Job Retention Bonus will fall away, the government will instead redeploy a retention incentive "at the appropriate time".

Sunak said the government’s intention was for the country’s new health restrictions to remain in place only until the start of December.

"As we saw from the first lockdown, the economic effects are much longer-lasting for businesses and areas than the duration of any restrictions," he said, flagging economic recovery has slowed and risks are skewed to the downside. 

Sunak also announced the government is increasing the support for millions more workers through the Self-Employment Income Support Scheme. 

The third grant, covering November to January, will now be calculated at 80% of average trading profits, up to a maximum of £7,500.

Abta, though, said the measures did not go far enough to support the travel sector, and renewed its call for tailored, sector-specific support.

“It is time this government stepped up and supported the UK travel industry," said Abta chief executive Mark Tanzer.

“Other sectors that have been hit hard by the pandemic have received tailored support from the government, but travel has been left waiting in spite of clear evidence of the harm that is being done.

“While the extension of furlough may seem positive on the face of it, it needs to be much more flexible for it to make a difference to jobs and businesses in the travel sector – taking into account that staff will have to work on re-bookings and refunds but won’t be generating any income.

“Without the flexibility in furlough and tailored support for the sector, travel agents and tour operators face more brutal months ahead with little or no ability to sell holidays but mounting costs and rising redundancies.”