UK has 19-month high in job placement growth, report says

LONDON - Growth in British permanent job placements rose last month at their sharpest rate in 19 months, while wages for permanent staff grew at their fastest pace in more than a year, a report showed on Wednesday.

The Recruitment and Employment Confederation/KPMG said its permanent placement index, which measures employment agency successes, jumped to 57.4 in May from 55.2 in April - the highest since October 2004, and well above the 50.0 level that separates growth from contraction.

The temporary staff placements index also showed growth at a 19-month high at 58.4 from 54.7 in April.

The report also showed that a fall in the number of people available to work drove up wage inflation last month, with the gauge of full-time pay growth shooting up to 59.0 in May from 57.2 - the highest reading since April 2005.

The index of temporary workers' pay growth, meanwhile, bounced to a six-month high of 56.6 versus 54.7 in April.

That is likely to worry policymakers who have been concerned that rising wage bills will put further pressure on inflation.

"The fact that growth in both the permanent and temporary sector has accelerated to a nineteen month high confirms that the UK labour market is in good health," said REC managing director Gareth Osborne.

"On the negative side, skills shortages continue to be a main concern and will continue to drive pay inflation," he said.

- REUTERS