Worker shortages trigger wage increases, but risk higher inflation

Businesses are facing their toughest recruitment market for 20 years, as workers’ ability to shop around for roles drive up wages, new survey data has found. Wage inflation for new workers was close to a three-and-a-half-year high, and many companies reported having to boost pay offers in order to attract staff, according to research from KPMG and the Recruitment and Employment Confederation. This showed employee earnings rising by 3.1pc in the 12 months to August, the fiercest growth seen since 2009. However, while firms were struggling to find staff, the rate at which new jobs were created hit a two year low.