In an ICAEW survey of more than 800 senior finance chiefs in businesses around the UK, three quarters (76%) said the government’s policy response had been ‘very successful or ‘fairly successful’ in mitigating a rise in unemployment as a result of Covid-19.

Half (54%) of respondents said their organisation had furloughed staff since the start of the lockdown.

However, the future prospects for employment levels looked bleaker: a third of respondents have already made staff redundant, and 41% said they expected the number of employees at their organisation would decrease by the end of the year.

The two most common drivers for layoffs were a fall in customer demand, cited by 63%, and the need for greater productivity and efficiency (mentioned by 59%).

Although 28% of firms were hiring despite the pandemic, this was balanced by 27% who had introduced a recruitment freeze.  Of those taking on staff, half were looking for high-end skills.

Iain Wright, ICAEW director for business and industrial strategy, said: ‘Our members give government credit for preserving jobs so far, but they believe that a hard landing for the economy is only months away, and that employment will be badly hit.

‘Some of this will be because market demand is weaker, but the crisis is also driving companies to become more efficient. This may improve productivity, but it will cost jobs.

‘What we need to see in the Chancellor’s autumn budget is a social, education and industrial strategy which combines protection and re-training for displaced workers over the short and medium term, with intervention and investment to create jobs with a future - especially in the green and scientific sectors.’