London wage growth reaches 10-month high as recruiters report staff shortage concerns


Almost a fifth of the London recruitment firms surveyed said average salaries were rising, compared to only 4.8 per cent who reported lower salaries, according to the figures from IHS Markit and the Recruitment and Employment Confederation (REC).

Permanent salaries across the entire UK also accelerated the fastest since April last year, City AM reports.

Recruiters across the UK reported higher vacancy rates, with the measure of vacancies rising sharply in January compared to December.

Meanwhile, staff availability in the capital has declined for 44 months in a row, reflecting the broader UK labour market, although the fall in availability in London has slowed in recent months.

“It’s definitely harder to find people with the skills,” said Kate Shoesmith, REC head of policy. “London’s need for people is always very great.”

The survey found shortages for skills in audit, risk, and compliance roles to serve London’s vast financial services industry, raising the prospect of companies having to increase wage offers to win new staff.

Shoesmith said: “If you really need staff in some of these key sectors you’re going to have to think about pay rates.”

Unemployment in the UK has reached levels not seen since 2005, well before the financial crisis. However, wage growth has so far failed to increase at levels expected by economists.

The Bank of England recently noted wage growth remained “persistently subdued by historical standards”, although it rose to 2.8 per cent nationwide in November, the highest point during 2016.

Kevin Green, chief executive of the REC, said: “Employers are crying out for people to fill vacancies. Recruiters say that fewer candidates are available in all regions, and this is dampening jobs growth.

“If businesses can’t find the people they need they will outsource abroad, automate activity or shut up shop, resulting in fewer jobs available to UK nationals.