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Starting salaries see slowdown

Published: February 25, 2016

Last month, the rise in starting salaries went up at the slowest pace since since October 2013, according to a study conducted by theRecruitment and Employment Confederation (REC).
This has done little to ease the concerns of the Bank of England (BoE), which last week cut its forecast for British wage growth – a key determinant of future interest rates.

The REC said that the labour market is currently looking positive. However, it did warn that Britain’s referendum on European Union membership – likely taking place in June – could create uncertainty for employers.

Wage growth in Britain slowed in the three months to November, even though unemployment last month fell to its lowest level since early 2006, according to official data.

January saw staff placed in permanent jobs at a faster rate than in December, according to the REC’s research. However, it highlighted an ongoing skills shortage in the construction and manufacturing industries, a trend which has been apparent for quite some time.

In addition, the REC warned that the government is risking exacerbating a shortage of nurses by cutting pay for temporary nursing staff.

“We believe that patient safety may be compromised,” Kevin Green, chief executive of the REC, said.

A separate survey from credit card company Barclaycard showed that consumer spending rose by 3.8 per cent year-on-year in January compared with a four per cent rise in December.

It also said that around 30 per cent of Britons now expect the economy to deteriorate in the next three months, which is an increase from 18 per cent in December.

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