UK Payrolls Slide On Coronavirus Lockdown

The number of workers on UK company payrolls slumped by 650,000 during Britain's coronavirus lockdown, official data showed Thursday, with the situation set to worsen as the government pulls support.

"The largest falls were seen at the start of the pandemic and while the number of payroll employees is still falling the decline is slowing," the Office for National Statistics (ONS) said in a release comparing June with March.

Britain entered lockdown on March 23, while restrictions started to ease last month.

The latest data comes following confirmation that the UK economy slumped almost one-fifth during lockdown -- and faces the prospect of its sharpest annual output decline for 300 years.

The ONS on Thursday added that the number of job vancancies sank 60 percent to 333,000 in the three months to June from a year earlier.

The claimant count -- or amount of people on welfare benefits -- dipped to 2.6 million people between May and June.

Yet since lockdown began, the count has more than doubled.

"As the COVID-19 pandemic took hold, the labour market weakened markedly, but that rate of decline slowed into June, though this is before recent job losses were reported," the ONS said Thursday.

Pharmacy giant Boots and department store group John Lewis last week said they would axe at least 5,300 jobs combined, despite government efforts to safeguard employment.

Some 9.3 million UK workers have had up to 80 percent of their wages paid for by the UK government under its furlough scheme, which ends in October.

Replacing furlough is a stimulus package worth ?30 billion ($37 billion, 32.5 billion euros) announced by finance minister Rishi Sunak -- but which experts say will not help to prevent further huge job losses.

The new measures include bonuses handed to companies for retaining furloughed staff and for offering apprenticeships amid fears of mass youth unemployment resulting from COVID-19 fallout.

The British Chamber of Commerce on Thursday called for more action.

"The government should consider additional support for employers... to reduce the overall cost of employment and prevent substantial redundancies," said BCC co-executive director Hannah Essex.

She added that measures could include a temporary cut in National Insurance -- part of the payrolls tax.

Essex spoke as a BCC survey showed that almost one third of UK businesses expect to cut their workforce in the next three months before the government's furlough scheme ends.

"Many businesses are suffering from an historic cash crunch and reduced demand," said Essex.

Britain's unemployment rate meanwhile stood at 3.9 percent in the three months to May, the ONS said, up only 0.1 percentage points from a year earlier with the data ignoring workers on furlough.

"Today's labour market figures reflect the calm before the storm," said Pablo Shah, senior economist at Centre for Economics and Business Research.

"As the furlough scheme is wound down in the coming months, millions of jobs -- particularly in sectors such as hospitality and travel -- will enter a highly precarious position.

"The major redundancies announced by numerous high-profile companies in recent weeks, across a variety of sectors, suggest that the labour market is already beginning to weaken considerably," Shah added.

Britain is in the final stages of rolling back nationwide coronavirus restrictions, with emphasis on the hospitality and tourism industries.

The country has suffered Europe's deadliest coronavirus outbreak with around 45,000 deaths.