The government has warned of high workplace absence rates following the Omicron surge © Dan Kitwood/Getty Images
The government has warned of high workplace absence rates following the Omicron surge © Dan Kitwood/Getty Images

Alarm sounded over inflation link to Omicron workplace absences

5 January 2022

Retailers are warning of rising cost pressures if action is not taken to tackle labour shortages caused by the Omicron variant.

The British Retail Consortium (BRC) sounded the alarm as the UK government said workplaces should prepare for absence rates of up to 25%.

Helen Dickinson, chief executive of the BRC, said: “Consumers may have noticed that their Christmas shop became a little more expensive in December. Not only did prices rise, but did so at a faster rate, especially in food. 

“Food prices were falling earlier on in 2021, but the acute labour shortages across supply chains, amongst other factors, led to the year ending with a notable increase.”

Prime minister Boris Johnson announced 100,000 key workers – including those in the food, transport and border industries – were being instructed to take lateral flow tests every working day in response to Omicron.

Johnson said tests, in short supply following the latest Covid surge, would be sent directly to affected workplaces, which he described as “critical national services”.

Lucy Morton, professional officer of the Immigration Services Union, which represents borders, customs and immigration workers, questioned the move. 

She told BBC Radio 4: “It's a little bit of an oddity, and certainly will help in the sort of general scheme of things that people are having difficulties getting a hold of enough lateral flow tests. 

“Inevitably, if we test every one of the 10,000 [border staff] every day, in fact what we're going to see is more people out of the workplace because more positives will be identified.

“But I do accept that if you identify the positives and then isolate them, you will slow the spread. But it does seem a slightly unusual approach to look at a critical industry and then test that with the inevitable result that there's going to be fewer people there.”

The BRC warned fresh food saw the largest rise in inflation in almost a decade, from 1.2% in November to 3% in December.

Food inflation more widely accelerated to 2.4% in December, up from 1.1% in November. This is the highest food inflation rate since March 2019, and comes after the food sector was rocked by labour and HGV driver shortages throughout the pandemic.

Dickinson said: “The trajectory for consumer prices is very clear: they will continue to rise, and at a faster rate. Retailers can no longer absorb all the cost pressures arising from more expensive transportation, labour shortages, and rising commodity and global food prices. 

“Consumers will already be harder pressed this year, with rising energy bills, the looming hike in national insurance, and more expensive mortgages. Government should relieve some of these costs by looking for long-term solutions for resolvable issues such as labour shortages.”

The Cabinet Office announced Chancellor of the Duchy of Lancaster Steve Barclay will be chairing “regular meetings” with ministers to closely monitor the impacts of Omicron on supply chains.

Barclay said: “As people return to work following the Christmas break, the high transmissibility levels of Omicron mean business and public services will face disruption in the coming weeks, particularly from higher than normal staff absence.

“We have been working through the Christmas period to prepare where possible for this, with all departments liaising closely with public and private sector leaders who are best placed to operationally manage their workforces.”

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