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Almost a third of UK firms plan to lay off staff over the next three months in a further sign of the coronavirus pandemic’s devastating impact on Britain’s job market, according to a report.

The British Chamber of Commerce said 29% of businesses in a survey of 7,400 firms planned to cut the size of their workforce in the next three months, the highest percentage of companies planning to make redundancies since the BCC began tracking employment intentions in 1989.

The BCC said the survey was carried out prior to the chancellor, Rishi Sunak, announcing in the summer econmic update up to £30bn of fresh tax and spending measures last week to protect jobs and kickstart Britain’s economic recovery from Covid-19.

Despite those additional spending measures promised, the BCC said Sunak still needed to take further action to limit the damage for jobs, including a temporary cut in employer national insurance contributions and more funding for training staff.

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For more in-depth analysis on the latest UK labour force statistics as well as rolling coverage of the world economy, eurozone, financial markets and business, head over to the Guardian’s business live blog, run by my colleague Graeme Wearden.

The business secretary Alok Sharma said many people were facing a “very, very difficult” time, following the publication of the latest unemployment figures.

“I think the best thing we can do is continue to open up the economy in a phased manner, a cautious manner, and get businesses up and running again,” he told BBC Radio 4’s Today programme.

As a government, we have put in £160bn of support through the furlough scheme, through loans, through grants to businesses. If we hadn’t done that the economy would have been in a far worse position.

It is going to be very, very difficult for lots of people and we are going to do everything we can to support them and keep businesses going through this very difficult period.

Around 500 jobs are being cut at luxury fashion firm Burberry in the UK and globally as it axes office space and makes cuts across stores outside Britain after lockdown sent sales tumbling.

The firm said around 150 office jobs were expected to go in the UK, where it is headquartered, and a further 350 overseas as it looks to slash annual costs by a further £55m. This comes on top of the previously announced £140m cost savings.

The cuts will affect around 5% of its 10,000 employees, including 4% of its 3,500 staff in the UK. It said it would also look to axe some office space as home working has proved successful amid lockdowns worldwide.

The details came as Burberry revealed comparable retail sales plunged 45% in the three months to 27 June due to the coronavirus lockdown closing stores and amid travel restrictions worldwide. Retail revenues were 49% lower.

It started the quarter with around 60% of stores closed, which reduced to 15% in June.

London was among the cities particularly badly impacted, as the firm makes much of its sales in the capital from tourist trade, which was been decimated by the grounding of planes during lockdowns.

Marco Gobbetti, the chief executive of Burberry, said:

Sales were severely impacted by the drop in luxury demand from Covid-19 and we expect it will take time to return to pre-crisis levels with the resumption of overseas travel.

He added:

As we enter the second phase of our strategy, we are sharpening our focus on product and making other organisational changes to increase our agility and generate structural savings that we will be able to reinvest into consumer-facing activities to further strengthen our luxury positioning.

The group also warned it expects its second quarter to the end of September to be “materially impacted” by the pandemic, with sales forecast to drop by up to 20%.This comes after comparable sales declines narrowed to 20% last month.

In retail, tourist flows are likely to remain negligible, and store operations are continuing to face significant headwinds, with some remaining closed and operating with reduced trading hours.

It said trading in the second half will “largely depend on the actions governments pursue to control the spread of the virus as economies restart”, including the potential for a second peak of the pandemic and additional lockdowns.

Here is the Guardian’s economics correspondent Richard Partington’s piece on the ONS figures.

The figures reveal that the number of hours worked in the UK plummeted between March and May at a record pace, the steepest drop since records began in 1971.

The England cricketer Jofra Archer has been dropped from playing the second test against the West Indies for breaking Covid-19 rules. After apologising to his teammates, Archer will now self-isolate for five days. More on this story to follow:

Continued lockdown in Leicester is no longer justified, the city’s mayor has said as the government prepares to decide whether to make changes to the restrictions.

Sir Peter Soulsby claimed the government had got Leicester into a “messy situation” by its handling of the local lockdown.

He said government data had “finally” told city officials which areas of Leicester were worst affected by coronavirus.

He told BBC Radio Leicester:

If only we’d had this information in advance, we’d have been able to do what they’re now doing in Blackburn, which is actually working closely with the communities and avoiding having to be locked down.

I very much regret the fact that the government didn’t trust us with this data earlier but I think now we’ve got it, we are the ones well-placed here in the city to make sure that we use it effectively.

Speaking to Sky News, he criticised what he described as the government’s “blanket political-led lockdown” of the whole of the city, and said he was angry and frustrated.

Some streets have no issue at all and in other streets nearby you’ve got a major issue, and we needed to know that at the time so we could intervene with pinpoint accuracy.

Further advice needs to be given, support needs to be given, and we needed to know where that advice and support was needed.

Asked when he expected to learn whether the local lockdown was being lifted, he added:

The secretary of state is due to make an announcement this afternoon. I expect to hear when the rest of the city, and indeed the rest of the country hears – because frankly we have not been involved in any of the decision-making about this.

We have been told what the political decisions will be, and we will be told again what the political decision will be – whether or not we come out of it.

Asked what he hoped the health and social care secretary Matt Hancock would say, Soulsby went on:

I hope he’ll recognise that as a result of what we are already doing here in the city, we are dramatically driving down the transmission of the virus.

Now that we do know where we need to be focusing our attention, I hope that he will allow us and trust us at a local level to work with the people of the city – and to recognise that the other 90% of the city that has been locked down, along with the area that is of concern, should be allowed to go free with the rest of the country.

Asked what his reaction would be if the government announced a further two-week lockdown, the city’s mayor said:

I think if we are told that, there are going to be an awful lot of Leicester people who are very angry indeed.

It was quite clear that it was a political decision taken without the advice of Public Health England to take us into this lockdown in the first place.

It’ll be a political decision to let us out and the sooner that political decision is taken, the better.

The ONS figures show that vacancies fell 463,000 between March and May to a record low of 333,000 as companies froze hiring in the face of the coronavirus crisis.

The pace of job cut announcements has also showed no sign of slowing down in recent weeks, with some 75,000 job losses announced last month alone, according to recent analysis by the PA Media news agency.

This points to further grim jobless figures in the months to come.

The ONS data also showed pressure on wages, with average weekly wages including bonuses down 1.2% year over year in May – a sign of the impact of millions of furloughed workers on 80% pay.

Jonathan Athow, the ONS’s deputy national statistician, said:

Pay is now falling on most measures, with many furloughed workers not having their wages topped up by their employers.

Matthew Percival, director for people and skills at the CBI business group, told PA:

These figures show serious difficulties for hundreds of thousands of people, but unfortunately this is still only the beginning of the impact on the labour market.

Flattening the unemployment curve will remain paramount.

The shadow chancellor, Anneliese Dodds, has said the latest unemployment figures from the ONS underlined the need for continuing government support to those sectors particularly hard hit by the coronavirus crisis.

“Clearly there are some trends that can be discerned – the number of hours worked going down and the amount of economic inactivity going up as well,” she told BBC Radio 4’s Today programme.

I think this is a very concerning time because we could see that being worsened by changes going ahead with the furlough scheme.

We do think that for particularly badly affected sectors there does need to be continuing support, otherwise we will see extra waves of people potentially moving into unemployment or economic inactivity.

The ONS’s early estimates showed the number of paid employees fell by 1.9% year on year in June to 28.4 million, and by 0.3% compared with the previous month.

As we’ve reported earlier, this suggests the number of UK workers on company payrolls has fallen during lockdown by nearly two-thirds of a million as the coronavirus crisis claimed another 74,000 jobs last month.

The ONS said the pace of job losses appeared to have slowed in June, with claims under Universal Credit by the unemployed and those on low incomes falling by 28,100 between May and June to 2.6 million.

But the claimant count has more than doubled since March – soaring 112.2% or by 1.4 million – in a sign of the mounting jobs crisis.

The ONS said unemployment fell 17,000 between March and May to 1.35 million, with the rate unchanged at 3.9%. Experts said this masked a fall in employment, down 126,000 in the quarter to 32.95 million, with the rate dropping to 76.4%.

With 9.4 million people on furlough classed as employed, the true impact is expected to only be shown after the current support scheme ends in October.

The ONS figures suggest the increase in job losses were not as bad as many feared, partly due to large numbers of businesses placing employees on furlough. This suggests the full impact of the pandemic on jobs won’t be known until the furlough scheme ends in October.

But the early estimates show 649,000 fewer people in employment in June compared with March.

ONS analysis suggests around half a million employees who said they were temporarily away from their jobs due to the pandemic were receiving no pay.

They also indicate that 76.4% of people aged 16-64 were in paid work between March and May.

There was also an all-time record low level of vacancies between April and June, 333,000 – 23% lower than the previous record, which was April 2009.

ONS analysis also found that pay is now growing at a slower rate than inflation, especially in sectors where furloughing is more prominent.

Good morning! I’m Lucy Campbell, here to take you through the latest developments in UK politics and the coronavirus outbreak as the morning unfolds.

The number of UK workers on payrolls fell by 649,000 between March and June as the coronavirus crisis claimed another 74,000 jobs last month, according to the Office for National Statistics.

Jonathan Athow, deputy national statistician at the ONS, said:

As the pandemic took hold, the labour market weakened markedly, but that rate of decline slowed into June, though this is before recent reports of job losses.

There are now almost two-thirds of a million fewer employees on the payroll than before the lockdown, according to the latest tax data.

The Labour Force Survey is showing only a small fall in employment, but shows a large number of people who report working no hours and getting no pay.

He added:

There are now far more out-of-work people who are not looking for a job than before the pandemic.

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Email: lucy.campbell@theguardian.com
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