Unemployment has fallen in Scotland but wage growth has failed to keep up with the rising cost of living, according to official figures.

The Office for National Statistics said regular pay rose by 4% between December and February, and by more than 5% when bonuses were taken into account.

But that did not keep up with inflation, which is running at 6.2%.

Meanwhile Scotland’s unemployment rate fell to 3.5%, down 0.1 percentage points from the previous quarter.

It has fallen 0.2 percentage points from the same period two years ago, before the onset of the pandemic.

Across the UK, 3.8% of the workforce is unemployed.

However, Scotland’s employment rate also fell during the months when a new wave of coronavirus – the Omicron variant – disrupted the economy.

It dropped 0.3 percentage points from the previous quarter to 74.7%, according to the ONS Labour Force Survey. That is 0.6 percentage points lower than pre-pandemic levels between December 2019 and February 2020.

Early estimates indicate that median monthly pay for payrolled employees in Scotland increased to £2,050 in March 2022 – an increase of 4.4% compared to the same period last year.

This is lower than the annual growth in median monthly pay for the UK over the same period (5.9%).

Tom Arthur, the Scottish government’s public finance minister, said: “This latest time period reflects the emergence of the Omicron variant at the end of last year, when it was necessary to implement strict public health measures to curtail its spread.

“Separate HMRC early estimates show 2.41m payrolled employees in Scotland in March 2022, 21,000 more than in February 2020, prior to the pandemic.

“While we continue to face economic challenges, with the rising cost of living, the negative effects of Brexit and the potential economic impacts of Russia’s illegal invasion of Ukraine, the Scottish government remains committed to doing all we can to help our economy recover.”

Chancellor of the Exchequer Rishi Sunak said: “Today’s stats show the continued strength of our jobs market, with the number of employees on payrolls rising once again in March and unemployment falling further below pre-pandemic levels.

“We are helping to cushion the impacts of global price rises through over £22bn of support for the cost of living this financial year. We’re also helping people to find new jobs, and ensuring work always pays as this is the best way to support households in the longer term.”

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