Recruitment agencies have reported a dip in the overall number of permanent job placements during October, but the IT sector showed a slight increase in the number of permanent vacancies.

It follows a recent report from the Higher Education Careers Services Unit (HECSU), which showed that the unemployment rate for IT graduates in the UK had fallen for the first time since the start of the recession.

The monthly Recruitment and Employment Confederation (REC) and KPMG Report on Jobs shows a reduction in permanent staff placements for the first time in over two years during October.

"Anecdotal evidence", said the REC, suggested the drop in placements reflected hesitancy among clients regarding the economic outlook, but temporary vacancies continued to rise, outpacing the previous month.

Starting salaries awarded to successful permanent candidates remained broadly unchanged in October.

Bernard Brown, partner and head of business services at KPMG, said: “Nervous employers are placing recruitment decisions on hold amidst concerns over the economic outlook, in many cases choosing instead to plug gaps with temps.

“There is some positive news with more permanent opportunities in IT, finance and accounting showing signs of improvement. However, we are still on a knife edge as we enter a critical time for European economic stability.”

In IT, Java developers were most in demand on the permanent jobs front, and in the temporary jobs sector, again, Java developers were in demand along with business analysts.

The recruiment data is collected from 400 employment and recruitment agencies.