Pay inflation at highest level since 2008

Permanent salary inflation increased in September, reaching its sharpest growth since February 2008, according to research by the Recruitment and Employment Confederation (REC) and KPMG.

The Report on jobs, which draws on original survey data provided by recruitment consultancies, found that temporary pay inflation also accelerated, with the latest rise only marginally slower than July 2013’s five-and-a-half year high.

Kevin Green, chief executive officer of the REC, said: “This month’s figures show the jobs market continues to be the success story in the UK economy with all regions and sectors experiencing growth. 

“The good news continues with starting salaries for permanent jobs rising at the fastest rate in over five and a half years and they have been rising for the last 17 months.”

Bernard Brown, partner and head of business services at KPMG, added: “Demand for staff may be up, but the number of individuals putting themselves on the market has dropped for the fifth consecutive month.

“Perhaps the pay on offer has to rise to encourage staff to ‘make the move’. If it doesn’t we could be about to witness a growing gap between what employers need and what employees are prepared to do.”