Employment prospects in Britain look rosy as two new surveys reveal increasing demand for staff but warn of the prospect of growing wage inflation.
Research amongst more than 2,000 firms by employment firm Manpower has found that the labour market is "positive and stable", with three-quarters of employers planning to maintain or increase their staffing levels.
Based on seasonally adjusted figures, 15 per cent more firms are planning to take on staff than are planning to reduce their headcount.
Employers in almost all sectors are planning to recruit over the next three months, with construction, transport and communications leading the way. Only in the utilities sector are job cuts expected.
But growing skills shortages coupled with pressure from higher public sector wage settlements are leading to fears of wage inflation.
Last month, official figures showed that UK wages grew at their fastest rate for almost three years during the last quarter of 2004, prompting fears of an increase in interest rates.
"The strong labour market indicates that employees are happy to move jobs, while employers are happy to replace them, "said Manpower's Mark Cahill.
"However, there is a prospect of growing wage inflation as the labour market tightens."
Meanwhile, the monthly Vacancies Index compiled by Deloitte and the Recruitment and Employment Confederation also indicates a marked rise in the demand for staff.
Data from recruitment consultancies suggest that demand for both permanent and temporary staff rose last month, with a particular surge in demand for executive and professional employees.