The official statistics revealed that Britain’s unemployment rate fell below its pre-pandemic level in the three months to January, while pay climbed faster than predicted, bolstering the Bank of England’s intentions to raise interest rates.
Despite the Omicron wave of COVID-19, the unemployment rate declined more than expected to 3.9 percent, according to figures from the Office for National Statistics (ONS) on Tuesday. This was a decrease from 4.1 percent in the fourth quarter of 2021 and the lowest level since the three months ending in January 2020.
Job openings reached a new high of 1.318 million in the three months to February, highlighting the labour crisis that many firms are confronting.
Following the central bank’s monthly policy meeting on Thursday, the Bank of England is expected to raise the Bank Rate by a quarter point to its pre-crisis level of 0.75 percent.
Some of its policymakers were alarmed by a survey of businesses conducted by the Bank of England, which revealed that corporations intended to raise pay by over 5% this year, far higher than in past years or pay settlements predicted by other surveys.
Four officials voted last month to raise rates to 0.75 percent rather than the final 0.5 percent.
The Bank of England is concerned that excessive inflation due by surging energy prices and post-COVID delays would take a long time to subside.
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