Employment in the UK fell by the largest amount in over a decade between April and June, according to the latest figures from the Office for National Statistics.
It was the largest quarterly decrease since May to July 2009, with the youngest workers, oldest workers and those in manual occupations were the worst hit during the pandemic, the ONS added.
The UK unemployment rate was estimated at 3.9%, largely unchanged on the year and the previous quarter, as millions remained on the government-backed furlough scheme.
But Suren Thiru, British Chambers of Commerce Head of Economics, said the data did not necessarily reflect reality: “While the headline data continues to lag behind the reality on the ground, the decline in the number of employees on payrolls and hours worked is further evidence of the damage being done to the UK labour market by the Coronavirus pandemic.
“The furlough scheme has been successful in preserving millions of jobs. However, with firms continuing to face a perfect storm of increased costs, reduced demand and diminished cash reserves, unemployment is likely to surge as the Government support schemes wind down, unless action is taken.
“A significant spike in job losses would be a major drag on any recovery, stifling consumer spending and reducing the productive capacity of the UK economy.
“To help businesses recruit and retain staff, more needs to be done to reduce the overall cost of employment and prevent substantial redundancies. This could include significant expansion of the Employment Allowance and a cut in employer National Insurance Contributions.”
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