Britain’s beleaguered retailers have slashed jobs at the fastest pace since the height of the financial crisis but the worst of the cuts are yet to come, according to a report.

The latest retail sales survey by the Confederation of British Industry (CBI) found the employment balance – measuring job changes over the past 12 months – sank to minus 45% in August from minus 20% in May.

This was its lowest level since February 2009 and retailers polled for the report expect it to fall further, with a balance of minus 52% for the next quarter.

Trading conditions for the retail sector remain tough, even against the backdrop of business slowly returning

The survey also revealed an unexpected fall in retail sales in August, with its balance falling to minus 6% from 4% in July.

The findings come amid mounting warnings of mass unemployment when the Government’s worker furlough scheme comes to an end in October.

The retail sector is among those which have leaned heavily on the scheme since lockdown forced vast swathes of the high street to shut.

Non-essential shops have been able to re-open since June, but many retailers have had to close shops and cut staff as shoppers continue to shun the high street.

According to recent figures compiled by the PA news agency, the retail bloodbath has already claimed or put under threat more than 41,000 UK jobs since the lockdown in late March.

Marks & Spencer added to the pain in the sector, announcing 7,000 job losses last week.

Alpesh Paleja, lead economist at the CBI, said: “The furlough scheme has proved effective at insulating workers and businesses in some of the worst-hit sectors during the pandemic, but these findings reinforce fears that many job losses have been delayed rather than avoided.”

He added: “Trading conditions for the retail sector remain tough, even against the backdrop of business slowly returning.

“Firms will be wary of deteriorating household incomes and the risk of further local lockdowns potentially hitting them in the pocket for a second time.”

The survey also showed that retailers expect sales to fall further in September, with a balance of minus 17%.

But official figures offered some good news for the embattled retail sector last week, revealing total retail sales volumes in July rose 3.6% compared with June and are now 3% above pre-pandemic levels.