UK skills shortage pushes starting salaries up but permanent jobs growth slows

The growth in the number of Britons obtaining permanent jobs has fallen to its slowest rate in 18 months although starting salaries have risen due a major skills shortage in a number of sectors.

According to the Recruitment and Employment Confederation, Britain's rapid rate of job creation is slowing, as hiring agencies and companies are finding it difficult to fill the positions with people with the right skills.

"It's been a strong year for the UK labour market and it's a sign of continuing business confidence that employers are expanding their permanent workforces and are prepared to make more generous offers to new recruits to attract the right people," said Kevin Green, CEO at the REC.

"Over a quarter of recruiters say that starting salaries for equivalent jobs are getting better by the month, driven by competition between employers for quality candidates."

REC said that IT & Computing employees were the most in-demand type of short-term staff in November, while construction workers registered the weakest rise in demand.

Meanwhile, London registered the slowest rise in permanent placements, while Midlands-based consultancies indicated the strongest growth.

But some analysts say that the uncertainty over the 2015 general election may have a knock-on effect on the UK jobs market.

"The rate at which permanent contracts are being signed is rising at the slowest rate in 18 months," said Bernard Brown, Partner and Head of Business Services at KPMG, which sponsors the report.

"This follows an unexpected fall in investment in the UK's third quarter. With political uncertainty in the UK, and in particular the country's position on Europe, could this be the start of a negative trend in the jobs market? Let's hope not and that the initiatives announced in the Autumn Statement convert to new employment opportunities."

In November, the Office for National Statistics said that the jobless rate was unchanged from 6% in the three months to August.

The ONS also revealed that wages increased at a faster rate than expected as average weekly earnings (excluding bonuses) grew at a rate of 1.3% in the year to September, against 1.2% Consumer Price Index (CPI) inflation over the same period.

Weekly wages for employees in UK were £455 (€583, $725) before tax and other deductions from pay.