The Government must announce extended support before the budget if struggling businesses are to survive, the CBI has warned.

In a letter to the Chancellor, CBI director-general Tony Danker has called for the furlough scheme, business rates holiday and deferral of VAT to be extended until at least the summer, and urged Sunak to announce extensions sooner rather than later.

Danker’s demands match the CBI’s budget submission, which called for an immediate £7.6bn injection from the Treasury as part of a £17.9bn recovery package and a £6bn extension of furlough, as well as extensions and deferrals of VAT bills and business rates.

With business resilience at a “sobering new low,” Danker said that many would be looking to make “tough decisions” on jobs in the next few weeks, and will be in desperate need for reason to continue.

“The budget comes at a crucial time for the UK,” he said. “The government’s support from the very start of this crisis has protected many jobs and livelihoods, and progress on the vaccine rollout brings real cause for optimism.

“But almost a year of disrupted demand and extensive restrictions to company operations is taking its toll. Staff morale has taken a hit. And business resilience has hit a sobering new low.

“If you want to have effective policy, I don’t think you can wait until 3 March. Firms are not going to wait until 3 March before making decisions.”