LONDON • Starting salaries for permanent jobs in Britain grew last month at the fastest pace in three years, something that may give the Bank of England (BoE) confidence that inflation pressure is on the rise, a survey showed yesterday.

The monthly gauge of starting salaries for permanent workers from the Recruitment and Employment Confederation (REC) and accountancy KPMG jumped to 63.4 from 60.5 in April, its highest since May 2015.

The survey, watched by BoE officials as a guide of the labour market's health, also showed the number of permanent staff starting new jobs rose last month at the weakest pace this year.

"Because of the lack of candidate availability, we are seeing employers paying higher salaries to attract the right people," REC director of policy Tom Hadley said.

Although inflation cooled unexpectedly in April, the BoE thinks domestic price pressures in Britain's economy are rising again.

Last month, BoE Governor Mark Carney highlighted stronger wage growth as he presented new forecasts for the economy.

Economists polled by Reuters last month think the BoE will raise interest rates to a new post-financial crisis high of 0.75 per cent in August.

Recruiters reported the strongest demand for engineering and IT permanent staff last month. Retail was the only sector in which demand declined.

Many British retailers are shutting shops in the face of online competition, a squeeze on consumer budgets, and a change in British spending habits from fashion towards holidays and entertainment.

REUTERS