Two-thirds of furloughed staff now back at work

Almost two thirds of workers who were put on furlough are back on the job, indicating that the economy is recovering and that the scheme succeeded in protecting their employment.

One-in-eight employees are still being paid to stay at home, according to the Office for National Statistics, down from almost one in three at the start of May.

It means the total number on the Job Retention Scheme has fallen by more than 60pc from its peak.

The Bank of England believes that about seven million people were furloughed at the peak in May, so the decline since then could mean the current level is about 2.6m.

The ONS survey was carried out earlier this month, shortly after employers became required to pay national insurance and pensions contributions for furloughed staff.

From next month they will have to pay at least 10pc of the employment cost, rising to 20pc in October, after which the scheme is due to end.

It means employers need to make a decision on the future of those workers still on the furlough scheme.

However, the increasing rebound means Oxford Economics now estimates that unemployment will rise to 6.5pc by the end of 2020, rather than the 8pc or more typically forecast by analysts. This would translate to another 900,000 unemployed, rather than the 1.5m plus added in a slower recovery.

Martin Beck, the economist behind the prediction, said reopening the economy combined with the lift from the VAT cut and Eat Out to Help Out scheme appears to have boosted activity, with customers happy to restart spending and employers keen to bring back staff.

“There was this argument that people would be too scared, but they seem willing to go back to normal. It is a sign that things are returning more quickly than feared,” he said, noting that retail sales are back to pre-Covid levels.

Road traffic indicators from the ONS are also recovering.

Heavy goods and commercial vehicles are back on the roads in numbers matching their levels in February, indicating demand for goods has returned to full health.

Cars are also bouncing around their old level, at between 83pc and 102pc of their old volumes over the course of this month, showing that people are increasingly willing to leave home and travel. However it does not necessarily mean travel is up overall, as some will be displaced from public transport.