Wage inflation at nine-year high

LONDON (Reuters) - Wages for permanent staff rose at their fastest rate in more than nine years last month as skill shortages intensified, a survey showed on Wednesday.

The KPMG/REC report on jobs index showed pay for permanent staff rose to 65.3 in July, its fastest since May 1998. Any reading above 50.0 denotes growth.

The pick-up came as other indicators pointed to a tightening labour market. The number of people placed in permanent jobs by recruitment consultancies rose at its fastest rate in seven years, with the index rising to 64.1 from 63.2.

The 'availability of staff' index fell for a fourth consecutive month.

"July's survey results continue to reflect a buoyant labour market," said Michael Carter, a partner at KPMG.

"The availability of staff has deteriorated at the fastest pace for over two years and employers need to continue to be creative in their recruitment strategies."

The survey's findings may rekindle concerns at the Bank of England that capacity constraints are putting pressure on inflation even though the main wage bargaining season has been uneventful.