Up to 200,000 hospitality staff in central London could become unemployed after the capital was plunged into a tier two lockdown.
Industry bosses fear tens of thousands could face the axe this weekend as households are banned from mixing indoors, including at hospitality venues.
Groups of six will still be allowed to meet in beer gardens or restaurants with outdoor seating under the new measures, which will also affect residents in Essex, York and parts of Derbyshire.
Dozens of revellers were pictured enjoying a final evening out with friends before the new restrictions are imposed.
Visit our live blog for the latest updates Coronavirus news live
But the loss of trade as a result could be ‘catastrophic’ for the capital, an industry expert has warned.
The owner of one restaurant in Dalston, east London, lost £25,000 in a single day after hundreds of cancellations in the wake of the Government’s tier two announcement.
Kate Nicholls, Chief Executive of UKHospitality, said businesses in central London were probably better off to be ‘paid to be closed’ – describing tier two as a ‘curse’ for traders, Mail Online reports.
She told BBC Breakfast: ‘The pain of tier two is that you have no government support and that’s what we need the government to urgently address otherwise you are going to have about 200,000 people in central London losing their jobs this weekend.
‘If you go into level three you are getting support if you’re closed, so at least you would have something to pay the teams.
‘Being moved into tier 2 is a curse for businesses. They will be trapped in a no man’s land of being open, but with severe restrictions that will significantly hit custom, all while unable to access the job support available in tier 3.
‘It is the worst of both worlds for businesses.’
Increased home working and tourism nosediving have also hit the capital hard, Ms Nicholls added.
She believes the government must give tier three support for businesses in tier two, or the capital could face ‘widespread’ job losses from November 1, when the furlough scheme is due to end.
The new job support scheme now requires employers to meet up to 55% of staff wages, with 22% covered by the Government.
Under the previous furlough scheme the Government covered 80% of workers’ wages for businesses unable to open their doors due to lockdown.
Lancashire will join Liverpool City region under tier three coronavirus restrictions from midnight tonight.
But council leaders have accused the government of ‘bullying’ them into accepting the measures – amid fears residents and businesses could be left destitute.
This afternoon Prime Minister Boris Johnson warned he would ‘intervene’ if an agreement cannot be reached to place Greater Manchester in tier three – describing the situation as ‘grave’.