Workers are seen in the More London district, with Tower Bridge behind during the morning rush hour in London, Britain, September 25, 2018. REUTERS/Toby Melville
LONDON (Reuters) – Starting salaries for new employees at British companies are rising at one of the fastest rates in recent years, reflecting staff shortages and robust demand from employers, recruiters said on Thursday.
New staff salary growth edged down only fractionally in October after hitting a three-year high in September, the monthly survey from the Recruitment and Employment Confederation (REC) showed.
“Whilst Brexit may be dampening overall business investment, firms continue to hire new staff at near record rates. Consequently, we’re seeing wages pushed upwards and a trend of canny workers job hopping to secure a pay rise,” said James Stewart, vice chair of accountants KPMG, who sponsor the survey.
Past REC data showing stronger growth in starting salaries has not always translated into stronger earnings across the British workforce as a whole.
However the most recent official data for average weekly earnings, excluding bonuses, showed the fastest annual growth since 2009, with pay up 3.1 percent on the year during the three months to the end of August.
Faster pay growth against a backdrop of weak productivity and labor shortages is a key reason why the Bank of England wants to raise interest rates over the medium term, despite a slowdown in overall economic growth since 2016’s Brexit vote.
The REC data showed demand for both permanent and temporary staff picked up in October, while the availability of staff contracted by the most in nine months.
Shortages of IT workers, engineers, nurses and care staff were particularly widespread.
Reporting by David Milliken, editing by Andy Bruce