Permanent starting salaries continued to rise across the UK in December amid reports of candidate shortages and robust demand for staff, according to data from the latest IHS Markit/Recruitment and Employment Confederation Report on Jobs.

The report also found that the availability of candidates to fulfil permanent roles declined sharply at the end of 2017, with the rate of deterioration among the fastest seen over the past two years. The supply of temporary labour also fell at a historically marked pace in December, despite the rate of reduction softening since November.

“Employers as a response to these candidate shortages are offering increased starting salaries to attract staff but while this has been the case for some time it isn’t translating into significant wage growth across the economy yet,” Kevin Green, REC Chief Executive, said.

Furthermore, the report showed that permanent staff placements increased at the quickest pace since August at the end of the year as agencies reported on strong demand for staff. At the same time, growth of temp billings remained sharp despite softening since November.

On a regional basis, the Midlands continued to signal the fastest increase in permanent placements at the end of the year. Meanwhile, the least marked rate of growth was seen in London. London also registered the fastest increase in temp billings of all five monitored UK regions in December. Nonetheless, rates of expansion were also sharp elsewhere.

Staff vacancies grew at the softest rate for one year in December, however the report added that demand for staff remained sharp overall and firmly above the average seen over the 20-year survey history.

December data pointed to rising demand for both private and public sector staff, though growth remained sharper for the former.

The steepest increase in vacancies was seen for permanent workers in the private sector, closely followed by demand for temporary workers in the sector. Relatively modest rates of growth were meanwhile seen for permanent and temporary vacancies across the public sector.

Accounting/Financial led a broad-based expansion of demand for permanent workers in December. This was closely followed by IT & Computing and Engineering. The slowest growth was signalled for Construction and Hotel & Catering.

The data also showed a further rise in vacancies for temporary staff across all nine monitored categories, led by Nursing/Medical/Care. Blue Collar and Accounting/Financial scored second and third place in the rankings, respectively.