- Bernard Brown, partner and head of business services at KPMG
The British job market saw demand for staff rising at the fastest pace since April 1998 in August as pay growth continued to increase strongly, driven by employee shortages, according to the Report on Jobs by the Recruitment and Employment Confederation (REC) and KPMG. The survey revealed that both the private and public sectors saw elevated demand for employees, with the former recording the sharper growth. As to the earnings, the REC said permanent wages kept growing at a robust rate in August with the latest increase in wage growth coming in only slightly slower than June's survey-record.
Meanwhile, half of all Britons expect interest rates to increase over the next 12 months, according to a Bank of England survey. The bank's poll showed 49% of respondents expected policy makers to begin rising rates from a historic low of 0.5% within a year, compared to 42% in May. This is the highest proportion since May 2011, when the economy was showing signs of recovery and three policymakers were voting to raise rates to keep a cap on inflation. The survey also showed inflation expectations were rising up. Households believe prices will increase by 2.8% over the coming year, up from 2.6% three months ago and the current inflation rate of 1.6%. For the next two years, inflation expectations, as measured by CPI rose to 2.8% from 2.5% in May, while inflation expectations five years from now advanced to 3.4% from 2.9% in May.
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