Inflation may pose tougher challenge than end of Covid restrictions

Employees are in a strong position - but the Bank will be keen to avoid a wage-price spiral

The UK labour market was hit by two big shocks towards the end of 2021: the end of the government's furlough scheme and the arrival of the Omicron variant.

The good news from the latest official data is both were negotiated without the feared lengthening of the dole queues. Employment is up, job vacancies are at a new record high and the unemployment rate is down.