LONDON (Reuters) - The pool of good candidates available to fill permanent jobs in Britain shrank in May at the fastest pace in more than 16 years, according to a survey that suggested slack in the labour market may be rapidly disappearing.
Friday's report from the Recruitment and Employment Confederation (REC) and KPMG also showed starting salaries continued to rise in May, although the pace eased slightly from April's rate which was an almost seven-year high.
The decline in the availability of permanent job candidates accelerated in May at the fastest pace since November 1997.
How fast labour market slack is dissipating is a crucial question for Bank of England policymakers as they gauge when to raise interest rates from record-low levels.
For now, the central bank thinks there are still enough people out of work or seeking more work to allow the recovery to continue without pushing up inflation.
"The creation of these jobs, combined with the return of job fluidity, is creating a dynamic labour market. However the big issue remains that employers are finding it hard to find the talent and skills they need," said Kevin Green, chief executive officer of the REC.
The survey showed demand was greatest for accountants and financial staff, followed by engineers.
(Reporting by Andy Bruce; Editing by Pravin Char)