UK starting salaries increase at slowest pace since 2013 but vacancy numbers at five-month high

British salaries for permanent and temporary employees in January 2016 grew at their lowest pace since October 2013, according to a survey from the Recruitment and Employment Confederation (REC) and Markit published on Friday (5 February).

Official data released in January showed that wage growth in Britain slowed in the three months to November 2015, even though unemployment fell to its lowest level in almost a decade, while on 4 February the Bank of England (BoE) cut its forecast for British wage growth. The BoE said it now expects average weekly earnings, described by BoE governor Mark Carney as one of the main determining factors of future interest rates, to increase by 3% this year – down from the 3.75% it predicted three months ago.

However, the conditions of Britain's labour market remained positive, the REC said, although it warned that Britain's referendum on European Union membership could generate uncertainty among employers. It added that the January data signalled a further increase in vacancies, with the pace of expansion picking up to a five-month high, with demand for permanent staff continued to rise at a faster pace than that signalled for short-term workers.

"The jobs market has started 2016 with a bang, our latest data shows strong growth in demand for staff and in permanent placements," said REC chief executive Kevin Green. "Professional service jobs are among those leading the way, with marketing and commercial roles especially in demand as businesses seek to make the most of the good economic climate."

However, the report warned that the construction and manufacturing sector faced skill shortages, while the government's decision to cut pay for temporary nursing staff could worsen the ongoing shortage of nurses in this sector.

"A severe shortage of nurses is being exacerbated by the government cutting pay for temporary doctors and nurses," added Green. "We believe that patient safety may be compromised as some NHS trusts struggle to staff wards."