North England Permanent Job Placements Boom While London Suffers

Recruitment and Employment Confederation data shows that people finding permanent jobs in Northern England has risen strongly while those in the country's capital were drying up.

Overall, REC revealed that the number of permanent job placements completed by recruitment consultants slowed at its slowest pace in 10 months in September as employers bumped up temporary staff pay packets instead.

Pay for temporary employees rose by its fastest pace in seven years.

"Starting salaries might look healthy, and are undoubtedly tempting some people to move, but the reality is that employers will soon reach a ceiling beyond which they won't be able to throw more cash around to land the right candidate," said Bernard Brown, a partner at the survey sponsor KPMG.

The Bank of England deputy governor warned recently that the central bank will be forced to hike interest rates soon if wages fail to increase in tandem with productivity.

According to Nemat 'Minouche' Shafik, the central bank will have to bump up rates from its record low of 0.5% in order to stimulate pay packets.

"If wage increases are expected, but productivity is performing well we can wait for longer; if those wage increases are not accompanied by productivity increases, then I think we will have to move more quickly on rates because inflationary pressures will build up," said Shafik.

"I think that's the key choice that we face."

The UK economy is growing faster than expected at 3.2% but wages are still moving up at a slower rate compared with inflation.

The Office for National Statistics (ONS) said total pay growth was just 0.7% in June 2014, well below price inflation of 1.9% - meaning wages are in real terms decline.