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Retail prices

CPI soars from 5.5% to 6.2%, RPI up from 7.8% to 8.2%

In February, the Retail Prices Index (RPI) stood at 320.2 (January 1987=100) and the annual rate of inflation increased from 7.8% in January to 8.2%.

Whilst RPI is no longer an official statistic, union negotiators consider it to be the best available measure of inflation.

The annual rate of inflation under the Consumer Prices Index (CPI) in February was 6.2% up from 5.5% in January.

Under the Consumer Prices Index Housing (CPIH), the annual rate of inflation in February was 5.5% up from 4.9% in February.

The largest contributing factors to the overall increase in inflation were rises in the cost of transport, furniture and household goods. Food inflation increased by 5.1%.

Inflation is expected to surge in April, when the energy price cap increases.

Figures for March 2022 are due to be published on 13 April 2022.

Latest pay deals

3.8% increase in the three months to January

The median standard increase for March 2021 - February 2022 was 2.0% (1.0% in the public sector) - the median increase on the lowest pay rate was higher at 2.25%. Three-quarters of these pay settlements were first stage/unstaged.

The median for the three months from December 2021-February 2022 was 3.3% for the standard increase - the increase on the lowest pay rate was higher at 4.0%.

Figures for March 2022 are due to be published on 13 April 2022.

Pay deals are calculated from Payline database of over 2,000 pay and conditions settlements. graph of pay settlements and inflation

Average earnings

Wage growth at 3.6% but not keeping pace with inflation

Average weekly earnings for regular pay (excluding bonuses) in December 2021 increased slightly to 3.6%.

This growth figure is likely to be more accurate than the summer figures as they are year on year comparisons with a time when wages were returning to pre-pandemic levels. However, it shows wages are actually being squeezed when accounting for inflation.

Headline growth is stronger in the private sector 3.9% (down from 4.1%) than in the public sector which lags at 2.7%.

Manufacturing gas dropped to 1.3% from 1.9% on the month but Finance and Business Services keeps overall growth high at 7.0%.

Early estimates for January 2022 indicate that median monthly pay for the UK was £2,050, an increase of 6.3% compared with the same period of the previous year. However, 10% of payrolled employees earned equal to or less than £672 per month.

Median pay across the regions of the UK in January 2022 ranged from £1,714 in Leicester to £3,144 in Wandsworth.

Figures for January / February are due to be published on 15 March.

Unemployment

Payroll jobs increase although overall employment rate down since pandemic

The latest ONS survey date for October to December 2021 show a continuing recovery in the labour market, with a quarterly increase in the employment rate and a decrease in the unemployment rate. However, economic inactivity has increased slightly on the quarter. The UK employment rate is still 1.0 percentage points lower than before the coronavirus pandemic (December 2019 to February 2020).

The UK unemployment rate was estimated at 4.1%, 0.2 percentage points lower than the previous three-month period, but 0.1 percentage points higher than before the coronavirus pandemic. An estimated 1.37m people said they were unemployed in December, down from 1.38 or 8,000 from the previous three month average.

Real time PAYE data from HMRC for January 2022 shows that the number of payrolled employees is up 108,000 from last month to a record 29.5 million.

This is a rise of 4.8% compared with the same period of the previous year. It was also a rise of 1,350,000 people over the 12-month period.

The Universal Credit claimant count in January decreased very slightly to 1,840,866 (seasonally-adjusted), down around 32,000 on the previous month.

Figures for February (payroll and claimants) and January (employment) are due to be published on 15 March.
 

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