Describing the measures as "unprecedented in the history of the British state", chancellor Rishi Sunak said the government would offer grants to employers across the country, covering wages for three months backdated to 1 March 2020 for employees at risk of being made redundant.
The grants will pay up to 80 per cent of at-risk employees' salaries, up to individual totals of £2,500 a month. They are designed for employees who are kept on by their companies despite effectively having no work to do as a result of the shutdown.
Previously announced Coronavirus-related business loans, available from Monday, will now be interest free for 12 months rather than six.
Speaking on the evening of Friday March 20, Mr Sunak added the government would also defer the next quarter of VAT payments until June. The next round of tax self-assessments for the self-employed will be delayed until January 2021.
The chancellor is also to strengthen the welfare system via a £7bn package of measures. The basic rate of Universal Credit will rise by £20 a week, and the self-employed will be eligible for such payments.
A further £1bn will also be put towards supporting renters via housing benefits and Universal Credit.
Economists and analysts welcomed the move, but predicted more measures would be required in the coming weeks.
"It is almost certain more will be needed to protect households specifically. The next logical step from here would be consumption vouchers or cash grants to households. The UK can afford this and shouldn't be squeamish about running a much larger deficit," said Melissa Davies, economist at equity research house Redburn.
The measures came as prime minister said all UK bars, cafes, gyms, nightclubs and restaurants - bar takeaways - would close as of this evening in a bid to limit the spread of the virus.