UK salaries rise as firms face growing candidate shortages

FIERCE competition for workers pushed UK salaries higher in April, according to a survey that will put pressure on the Bank of England (BOE) to continue tightening monetary policy in its battle to tame inflation.

As candidate availability declined for the 14th straight month, starting-salary inflation held close to a record high, the Recruitment and Employment Confederation (REC) and KPMG said in a report published Thursday (May 12).

The scarcity was driven by low unemployment, fewer foreign workers and a hesitancy to change jobs due to the pandemic and geopolitical uncertainty triggered by the war in Ukraine, recruiters said.

The figures come a week after the BOE raised interest rates to a 13-year high as officials expressed concern that rampant inflation could take root if workers pressed for pay increases to match.

Despite the upward pressures, wages are still trailing far behind inflation, leaving Britons facing one of the worst periods on record for living standards.

"The labour market has been tightening for months on end, driving near-record growth in starting salaries for new staff," said Neil Carberry, chief executive of the REC. "With vacancy numbers historically high, this is a great time to be looking for a job - and a pay rise to help meet the rising cost of living."

SEE ALSO

UK to enter recession this year: think-tank NIESR

DECODING ASIA

Navigate Asia in
a new global order

Get the insights delivered to your inbox.

The REC also said:

• Candidate shortages meant the rise in staff placements was the slowest for at least a year
• The supply of permanent labour fell at a faster pace than for temporary staff
• Though the rate of vacancy growth softened, demand for staff rose at a historically sharp pace. It was led by the needs of hotels and caterers, engineering firms and Blue Collar industries BLOOMBERG