Unemployment falls to pre-covid levels, official figures show

The Office for National Statistics said there were 1.34 million unemployed in the quarter to January, down 88,000 on the previous three months and below the 1.36 million recorded in December to February 2020.

But the figures revealed the tightening squeeze of the cost-of-living crisis, as regular pay failed to keep up with soaring inflation, with average weekly earnings excluding bonuses up 3.8 per cent between November and January.

When taking rising prices into account, as measured by Consumer Prices Index inflation, wages fell by 1.6 per cent compared with a year earlier.

Experts warned the pressure on household finances will intensify due to the Ukraine conflict, with gas and fuel prices set to make inflation rise from 5.5 per cent currently to 9 per cent in April.

The ONS figures showed the unemployment rate falling to 3.9 per cent in the most recent quarter, down from 4.1 per cent in the three months to December.

It came as the number of workers on payrolls jumped by 275,000 between January and February to a fresh record of 29.7 million.

Vacancies also hit a new high, up 105,000 quarter on quarter to 1.3 million as firms struggle to secure staff.

Across Lancashire, the number of people claiming work-related benefits such as Universal Credit in February, fell.

In the Blackpool North and Cleveleys constituency, there were 3,170 claiming benefits, a figure down 3.2 per cent on February 2021.

In Blackpool South there were 4,545 claiming, down 4.3 per cent; in Preston there were 4,035 claiming, down 2.3 per cent on February 2021; in Chorley there were 2,030 claimants, down 1.6 per cent; in Fylde there were 1,635 claiming, down 2 per cent; in Lancaster and Fleetwood there were 2,080, down 1.8 per cent.

In South Ribble there were 1,415 claiming, down 1.4 per cent,; in the Ribble Valley there were 1,350, down 1.4 per cent and in Wyre and Preston North, there were 1,070 claimants, a figure down 1.6 per cent on February last year.

ONS chief economist Grant Fitzner said: “The labour market continues to recover from the effects of the pandemic, with the number of unemployed people falling below its pre-pandemic level for the first time and another strong rise in employees on payroll in February.

“However, the number of people out of work and not looking for a job rose again, meaning total employment remained well below its pre-pandemic level."

Suren Thiru from the British Chambers of Commerce said: “Although there was a modest pick-up in regular pay growth, wages are still comfortably trailing behind inflation, which is putting the brakes on consumer spending by eroding their spending power and confidence.

“While firms are reporting some upward pressure on pay settlements amid a very tight labour market, the deteriorating economic outlook and the historic surge in business costs are likely to keep a lid on pay growth.

“Record vacancies highlights chronic imbalances in the UK labour market with demand for workers outpacing supply.

“While demand for labour is currently strong, the damage to firms’ finances from rising cost pressures, a weakening economic outlook and next month’s national insurance rise may significantly squeeze recruitment intentions and pay growth in the near term."