UK starting salaries jump as Brexit vote hits staff supply

Wages for British labourers starting in permanent jobs increased at the fastest speed since 2015 as businesses saw it harder to hire staff, a difficulty worsened by Brexit, a survey of recruitment firms confirmed on Friday.

The signs of pay force in the Recruitment and Employment Confederation (REC) study contrast with Britain’s official measure of growth in incomes which has declined lately.

The increase in initial salaries for permanent jobs hit a 19-month high in June, REC said, giving Bank of England policymakers a rare reminder that wage increase in Britain will hasten, as they suspect.

“With fewer people currently looking for jobs, employers are having to increase starting salaries to secure the talent they need,” Tom Hadley, REC Director of Policy, said.

“Existing skills shortages are being exacerbated by Brexit. For example, demand for accountants and other financial roles has increased recently as organisations try to protect themselves against economic uncertainty.”

Other signs of pay have been weak. Official data revealed wages rose at the slowest pace since February last year in the three months to April, increasing 2.1 percent on the year and declining further behind inflation which is close to 3 percent.

Other industry surveys have also pointed to weak upward force on wages.