Employers have applied to furlough 3.2 million workers in just three days under the government's coronavirus Job Retention Scheme.

Since the scheme opened on Monday, HMRC has received 435,000 applications from employers seeking government support to pay employees wages, with the total value of £3.75bn.

There were 126,000 new claims from businesses on Wednesday, the prime minister’s official spokesperson said.

Under the scheme the government will refund employees for 80 per cent of wages up to £2,500 per month for staff who do not have work during the coronavirus pandemic.

It has been widely welcomed by companies, many of which have seen their income fall sharply as a result of the pandemic and lockdown measures in place to slow the virus' spread.

Around 8-9 million people are forecast to go onto furlough during the crisis, according to analysis by the Reolution Foundation.

The think tank put the total cost to taxpayers at £30bn to £40bn over three months, however the chancellor has since extended the scheme for an extra month to the end of June.

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An estimated 3.4 million people are forecast to become unemployed during the crisis, a figure that could have risen to "catastrophic" levels without the Job Retention Scheme, the Resolution Foundation said.

It came as the government faced calls to tighten up its support for small and medium-sized businesses after it emerged that banks had agreed just £2.8bn of state-backed loans.

Business secretary Alok Sharma struggled to explain on Thursday why British banks had not approved more lending under the Coronavirus Business Interruption Loan Scheme.

MPs on the House of Commons Business committee grilled Mr Sharma on why Switzerland, Hong Kong, Germany and other nations had been able to deliver multiple times the amount of emergency funding to businesses than the UK had.

"In terms of the [Coronavirus Business Interruption Loan Scheme]... the latest figures being published today are showing that so far there are around 28,000 applications to date and 16,600 businesses have secured a loan, representing a total value of £2.8bn," Mr Sharma said.