According to a survey by financial-advisory group KPMG (www.kpmg.com) and the Recruitment and Employment Confederation (REC), skills shortages are driving up pay.

REC chief executive Kevin Green said that the rate of pay growth last month was the strongest since last September.

He added: “Almost a third of recruiters say that starting salaries have increased in comparison to the previous month. This suggests that labour market fluidity is returning. Employers need to realise that people are deciding to change jobs because they can earn more than in their current job.”

Mr Green said that businesses should “think hard about retaining scarce resources. As politicians debate skills, education and immigration in the run-up to the General Election, we hope they recognise the potential impact of this skills crisis, because a lack of workers to meet demand threatens the sustainability of our economic growth.”

KPMG’s Bernard Brown said: “Recruiters are struggling with industry-wide skills shortages, as the demand for talent continues to outstrip the number of candidates seeking work. This pervasive skills shortage could put the brakes on economic growth, if it continues unabated.”