UK payrolls jump but soaring inflation hits wages

LONDON — UK payrolls jumped in January as Omicron fears receded but workers' wage rises are failing to keep pace with soaring inflation, official data showed on Tuesday.

The number of UK workers on payrolls rose 108,000 to a record-high 29.5 million last month, the Office for National Statistics (ONS) said in a statement.

The UK's unemployment rate stood at 4.1 per cent in the three months to the end of December, unchanged from the quarter to the end of November, the ONS added.

"The number of employees on payrolls rose again in January... and is now well above pre-pandemic levels," said Sam Beckett, head of economic statistics at the ONS.

She added, however, that the number of people in employment overall was "well below" its pre-pandemic level.

"This is because there are now far fewer self-employed people," Beckett noted.

Tuesday's data revealed also record vacancy levels.

Average pay, excluding bonuses, grew 3.7 per cent in the quarter to the end of December — lagging near 30-year high UK inflation at 5.4 per cent.

The ONS on Wednesday publishes annual inflation figures for January, which is set to come in at an even higher level.

The Bank of England has said that Britain's annual inflation rate will peak at 7.25 per cent in April as energy prices in particular rocket.

"The outlook for real wages, and associated pressure on consumer spending, is set to get worse before it gets better," EY ITEM Club economist Martin Beck said following Tuesday's data.

The discovery of the Omicron variant of the coronavirus in late November raised concerns about its potential effects on the global economy as countries restored some travel restrictions.

But the highly infectious variant has proven less deadly than its predecessors.