Permanent salaries rose at their fastest rate since December 2007 last month, with the IT sector among the industries showing the most wage growth, according to the monthly Recruitment and Employment Confederation (REC) and KPMG Report on Jobs.

There was a sharper increase in salaries as candidate availability deteriorated further, says the report, with overall vacancies rising at their sharpest rate in over six years.

Overall demand for staff rose at the fastest pace since June 2007, and higher vacancy levels were seen for both permanent and temporary workers, in both the public and private sectors and across all nine monitored industry categories.

Overall, the strongest demand for permanent staff was seen for engineering workers, followed by construction staff and then IT and computing employees.

The key job areas in high demand in IT and computing were business analysts, developers, digital marketing, infrastructure, Java, PHP, SAP and support.

The report says starting salaries for successful permanent candidates rose further in October, with the rate of increase accelerating to the strongest since December 2007. Temp pay rates also rose, albeit at the slowest pace in four months.

All four monitored English regions saw higher permanent placements. The strongest growth was recorded in the Midlands, while the slowest expansion was indicated in London.

The Midlands continued to post the strongest temp jobs growth during the latest survey period, while the South registered the slowest rise.

Private sector vacancies continued to rise at a faster pace than public sector roles in the latest survey period.

REC CEO Kevin Green said: "This is another month of growth for both temporary and permanent jobs, in all regions, in all sectors and now across both the private and public sectors.

"The real good news for workers is that starting salaries have risen at the sharpest rate in six years. But the skills shortage shows no signs of abating, and although it is starting to drive wages up, there is a real danger that it could cause serious damage to future economic growth in the UK."