Pay rates for permanent and temporary staff increased in recent months, according to a new report.

Research from the Recruitment and Employment Confederation (REC), KPMG and Markit, compiled as part of the monthly Report on Jobs, found that while pay levels are on the rise, the number of candidates available to employers is falling.

Overall, four in ten of the 500 UK recruitment consultancies surveyed said there were fewer available permanent candidates than there had been in the previous month, reports

In terms of temporary staff, 32.6 per cent said there were fewer candidates to pick from, while only 9.8 per cent said that there had been improvement in availability.

On the other side of the spectrum, the amount of people placed into roles has also risen every month this year. Around 43 per cent of employers reported an increase in the number of permanent staff hires, compared with just 18 per cent who noted they recruited fewer.

Bernard Brown of KPMG commented on the report to “Trying to fill vacancies in the current climate must feel like wandering through a hall of mirrors for the UK’s employers.

“No sooner are they in a position to reflect the improving economy by creating roles and offering tempting salaries, than the search for talent seems to reach a dead end, with candidates preferring to hide in the shadows,” he added.