UK sheds 730,000 jobs during the pandemic and wages are falling

London(CNN Business) The UK economy has shed 730,000 jobs since the coronavirus pandemic shuttered businesses in March, with the young, the old and the self-employed bearing the brunt of the unemployment crisis.

The Office for National Statistics said Tuesday that there was a record drop in the number of workers over the age of 65 on company payrolls during the April-June quarter, while people under 24 were also hit hard.

The overall drop in employment in the quarter was the biggest since the great recession of 2009 and coincided with lockdown measures that shut non-essential stores and restaurants, restricted movement and enforced strict social distancing.

Wages over the three months to June dropped for the first time since records began in 2001, the ONS added. That means living standards fell, even before inflation is taken into account.

There was also a record drop in the number of self-employed in the second quarter, and the number of people claiming unemployment benefits, including those working fewer hours or on low incomes, more than doubled between March and July to reach 2.7 million.

"Hours worked has continued to fall reaching record lows both on the year and on the quarter," the ONS said.

The coronavirus pandemic has pushed the United Kingdom into its worst slump in nearly a century. Major UK companies, including British Airways and BP (BP), have culled more than 100,000 jobs and there are fears that layoffs will rise when the government's furlough program comes to an end in October. Many companies in retail and hospitality are fighting for survival.

Despite the loss of jobs, Britain's unemployment rate remained largely unchanged at 3.9% in the second quarter, because it does not include people out of work but not currently looking for a job, or those on furlough programs, the ONS said.

About 7.5 million people are estimated to have been on furlough in June, with over three million of these being away from work for three months or more, according to the ONS.

Brexit is only deepening the United Kingdom's economic woes. Time is running out for Britain to secure a deal with the European Union — its biggest trading partner — and even if it does, UK companies will face billions in extra costs of doing business, which could further endanger jobs. The UK government has also so far failed to replicate most of the trade deals between the EU and third countries that will no longer benefit British exporters at the end of 2020.