Problems after update to Big Sur

Hi,

Yesterday I upgraded my Mac Air to Big Sur and now when I move my mouse it lag spikes all the time, so it look like the mouse is jumping from one position to other. I tried to disconnect my Monitor and Mouse, restart the mac, then reconnect it, did not help.

When using touch pad there is no problems.

What did the update have to do with my peripherals, and is it possible to fix it, as the mac is currently unusable.