Redundancies triggered by the coronavirus crisis are only likely to increase, a leading business organisation has warned, after official figures this morning revealed the number of employees on payrolls in the UK has fallen by 695,000 since March.

The Institute of Directors warned of worse to come as the UK Government winds down the furlough support scheme, which is due to end in October.

Tej Parikh, chief economist at the Institute of Directors, said: “Coronavirus is taking its toll on the jobs market, but the full extent of the damage is still to emerge. With the hob retention scheme winding down, cash-strapped firms will be struggling to support their staff. Redundancies are only likely to increase as state support for employee wages ceases at the end of October. For many companies, demand remains very much limited, with local lockdowns and renewed restrictions adding to the difficulties.”

He added: “The Government must act quickly to counteract job losses and prevent the scarring effect of long-term unemployment. With youth unemployment increasing, the Kickstart scheme targets a critical area, but the Treasury should go much further.

“Broad-based measures to lower the cost of hiring and retaining staff, particularly by reducing the burden of employers’ National Insurance Contributions, are needed. The Chancellor should avoid any delays to the Budget. The sooner action can be taken the better. With firms set to make difficult decisions on their staff, indications that further assistance is on its way will be even more crucial.”