New report reveals skills shortages in a number of professions combined with fewer job applicants coming from the EU are forcing up salary levels as firms look to grab the best talent. Tony McDonough reports

While pay growth across the board remains subdued and lagging inflation, salary levels in professional and skilled roles are showing big rises with the legal profession leading the way.

A new study from UK job site CV-Library reveals skills shortages in a number of sectors are driving up pay levels well above the rate of inflation.

And the report says the impending Brexit could also be having an impact with the number of job applications from EU workers falling by 4.3% year-on-year in September 2017.

Data taken from CV-Libraries national database shows that between the third and fourth quarters of 2017 salary growth in the legal sector was 9.5% – well above the UK inflation rate at the end of the year of 2.7%.

Recruitment (7.6%) and education (6.5) also saw significant salary rises followed by automotive/aerospace, manufacturing, marketing, retail/purchasing construction and IT.

Slowest growth on the report’s sector list was engineering with below inflation growth of less than 2%.

The CV-Library report said: “Competition for the top talent is tough right now. Due to the ongoing skills shortage and businesses are fighting harder than ever to secure the best possible candidates and are remaining active in their recruitment efforts.

“It’s clear from the data that businesses have recognised the need to offer higher salaries if they hope to stay ahead of their competitors.

“Though many organisations may be reluctant to boost pay packets, with unemployment at its lowest rate in 42 years, it’s clear that offering competitive packages is key to rousing candidate appetite and stimulating growth in the economy.”

In the last few days one economic expert – Michael Saunders – a member of the Bank of England’s Monetary Policy Committee has forecast that wage growth across the UK could hit 3% this year, finally overtaking inflation. Latest data puts wage growth at 2.5%, behind inflation at 3.1% but the gap is slowly narrowing.