April 10, 2018 / 12:15 AM / 7 months ago

UK starting salaries for permanent jobs rise at slowest pace in nine months - REC

FILE PHOTO - People walk through the financial district of Canary Wharf, London, Britain 28 September 2017. REUTERS/Afolabi Sotunde

LONDON, (Reuters) - British companies raised salaries for new permanent staff in March at the slowest rate in nine months, according to a survey that may surprise Bank of England officials expecting a further improvement in pay growth.

The monthly gauge of starting salaries for permanent workers from the Recruitment and Employment Confederation (REC) and accountancy KPMG from fell to 60.0 from 61.5 in February, its lowest level since June last year.

March marked the second month of slowing pay growth by this measure, reflecting an easing of acute staff shortages since the start of the year.

While official data last month showed workers’ total earnings, including bonuses, rose by an annual 2.8 percent in the three months to January - the biggest increase since 2015 - Tuesday’s survey of recruitment firms may raise questions about the strength of pay pressure further ahead.

Last month Bank of England rate-setter Gertjan Vlieghe said he was more confident that upward pressure on pay growth was underway than in previous years, based on surveys including the REC report.

The BoE is widely expected to raise interest rates in May.

The REC survey showed demand for staff - both temporary and permanent - continued to rise strongly, albeit at a slower rate than late last year.

“In hospitality, demand for temporary staff is really high, but businesses have had fewer applicants from the EU since the Brexit vote,” REC director of policy Tom Hadley said.

Reporting by Andy Bruce; Editing by Hugh Lawson

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