Massive surge in salary increases contradicts government figures

Mark Carney: pay rises are factoring in rate hikes
New salaries are surging, according to a major survey of recruiters, clashing with the government’s official measure of wage growth and providing an uncertain signal on when interest rates will start to rise.

The latest figures from the Recruitment and Employment Confederation (REC) and KPMG’s survey show starting salaries climbing at the fastest pace in at least 17 years, dating back to the start of the survey.

The survey index for permanent salaries hit 66.2, the highest since it began in 1997, with any figure over 50 indicating growth.

The data heavily contradicted official statistics, which show barely any pay pressure above inflation generally. Annual weekly earnings rose 1.7 per cent in the year to March, according to the Office for National Statistics (ONS), matching inflation exactly. The figures are also important from the Bank of England governor Mark Carney’s perspective – senior officials have made clear that weak salary growth is one of the last factors holding back a rise in rates.

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