Wage Rises Highest Since 1998

Salary inflation has reached its highest level since May 1998.

That is the finding of the report on jobs by the Recruitment & Employment Confederation and KPMG.

Michael Carter, people services partner at KPMG, said:

"July's survey results continue to reflect a buoyant labour market.

The availability of staff has deteriorated at the fastest pace for over two years and employers need to continue to be creative in their recruitment strategies."

Permanent salaries, as measured by an index, increased to 65.3 from 64.2.

This will increase pressure on the Bank of England to raise interest rates at least one more time this year.