A new survey conducted by the Recruitment and Employment Confederation and KPMG shows that starting salaries for new permanent roles are increasing at the fastest rate since last October.
This comes amid a general decline in job vacancies, with Office of National Statistics data showing a 1.3% sequential fall in vacancies in the last quarter.
“Employers are still hitting the brakes on recruitment with the general election period causing some uncertainty,” said Jon Holt, chief executive at KPMG in the UK, in comments published in Bloomberg.
“Permanent hiring has taken a particular hit. This lack of demand means competition for the few roles available continues to drive pay growth,” he added.
This will prove to be a minor annoyance for the Bank of England’s plans to reduce interest rates by the end of this year, as higher starting wages could put upward pressure on inflation.
According to the REC survey, six out of the 10 polled sectors saw a decline in demand for permanent staff, although “as policy uncertainty abates, and interest rates drop, we expect permanent hirers to return to the market this summer,” said REC chief executive Neil Carberry.