Omicron staff absence to further push up prices, says CBI

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Omicron wave of the coronavirus pandemic will further push up prices in the UK in the coming weeks, the Confederation of British Industry (CBI) has warned citing extra cost of dealing with a shortage of workers created by the pandemic.

About 190,000 British companies it speaks for are currently grappling with double the normal number of employee absences. Companies reporting absence rates of around 10 to 15 percent, instead of the usual 5 to 6 percent for this time of year, CBI said.

“If that 10 to 15 percent hits 20 percent, that’s when you would see businesses closing temporarily, especially small and medium-sized enterprises,” Liz Crowhurst, director of the CBI’s policy unit, told FT.

Larger companies would be able to cope by hiring temporary workers, putting off non-essential work and scraping by with lower staffing as long as self-isolating workers did  not rise above the tipping point, CBI said.

UK Warehousing Association chief executive Clare Bottle said some operators reported that more than 30% of their staff were off sick in the first week after the winter holidays. 

Consequently, several warehouses have reduced sick pay to the statutory minimum, following in the footsteps of high-profile retailers including Morrisons, Ikea and Next. 

Maxim Logistics, a company that delivers to food manufacturers, said Omicron made it harder to manage staff absences especially due to the longer self-isolation requirement for those who were not vaccinated. 

The managing director said despite “juggling people around” they have seen more customers cancelling orders at short notice because they couldn’t run enough shifts. 

Health secretary Sajid Javid has reduced the Covid-19 isolation period to five full days after pressures from businesses and party members.

This news comes as Tesco revealed around 13,000 temporary Christmas staff have been kept on to help cope with Omicron staff absences. Last week, Sainsbury’s became the latest UK supermarket to push up the pay of its shop workers, to at least 10 pounds an hour.