It is to be seen whether this pay growth will translate to better and stronger earnings across the British workforce.
On Thursday, recruiters disclosed the starting salaries across British companies are rising at their fastest rates in recent years, thus reflecting staff shortages and robust demand from employers.
In October. Having hit a 3-year high in the previous month, the salary growth of new staff had edged down fractionally, as per the monthly survey from the Recruitment and Employment Confederation (REC).
“Whilst Brexit may be dampening overall business investment, firms continue to hire new staff at near record rates. Consequently, we’re seeing wages pushed upwards and a trend of canny workers job hopping to secure a pay rise,” said James Stewart, vice chair of accountants KPMG.
Incidentally, previous REC data shows stronger growth in starting salaries has not always translated into stronger earnings across the British workforce as a whole.
Faster pay growth against a backdrop of weak productivity and labor shortages is primarily the reason why Britain’s central bank, the Bank of England, wants to raise interest rates over the medium term, despite a slowdown in overall economic growth since 2016’s Brexit vote.
According to the REC data, demand for, permanent and temporary staff, had picked up in October, while the availability of staff contracted by the most in nine months.
Shortages of IT workers, engineers, nurses and care staff were particularly widespread.