Live News: Scotland to lift Covid restrictions next week after cases fall

The UK labor shortage worsened at the end of 2021, with job vacancies hitting a record high, but average earnings started to fall as inflation outpaced wage growth.

Official data released on Tuesday showed unemployment fell to 4.1% in the three months to November, 0.1 percentage point above its pre-pandemic rate.

The employment rate has risen to 75.5%, but remains 1.1 percentage points below its pre-crisis rate – due to an increase in inactivity which, according to the Statistics Office national, was due to the abandonment of older workers.

With employers struggling to recruit, job vacancies hit a record 1,247,000 in the three months to December, equivalent to four in every 100 jobs in the economy, with a quarter of a million jobs unfilled in the health and social services sector alone.

There were few signs of an impact on employment at the start of the Omicron outbreak, with real-time data from December showing the number of salaried employees rising by 184,000.

But Tony Wilson, director of the Institute for Employment Studies, said the figures were “disappointing”, with inactivity rising despite unprecedented demand for staff.

While staff shortages have led to faster wage growth in some sectors, the ONS said average earnings were falling in real terms, with inflation outpacing wage gains.

Its main measure of growth in average weekly earnings, excluding bonuses, was 3.8% for the three months to November – leaving earnings flat in real terms over the same period and down 1% in November alone.

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