Some businesses are asking staff to take pay cuts of up to 40% in a bid to keep their companies going, according to the GMB union.

The organisation told the BBC it had heard of several such cases, including a hire car driver who had been asked to take a £12,000 pay cut from his annual salary of £30,000.

"We're also hearing on the grapevine from a number of our employers up and down the country that they're also feeling the squeeze, and they want to start talking about pay cuts and other ways of saving money," said Martin Smith from GMB.

Meanwhile, the Federation of Small Businesses has warned that reducing wages and asking staff to work longer hours could be the only alternative to redundancies and closures.