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But wages for temporary workers increased at the slowest rate in five months in March Reuters

The cost of living in the UK is continuing to ease as starting salaries for permanent workers surged in March, growing at the sharpest rate since July 2007.

According to research from The Recruitment and Employment Confederation (REC) and KPMG Report on Jobs, the country's economic recovery is translating into bigger pay packets for employees.

But the research also revealed that wages for temporary workers increased at the slowest rate in five months in March.

"The trend of growth in people finding jobs across all industrial sectors and regions continues," said Tom Hadley, director of the REC.

"Starting salaries and hourly pay rates are up as employers battle to entice the talent they need. As real wages begin to rise across the jobs market people will start to feel better off."

The survey, which questioned recruitment consultants working in Britain, also indicated that there was a steep decline in candidate availability in March.

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Permanent staff availability fell at the sharpest rate since October 2004, while the latest drop in contract staff availability was worryingly the fastest in almost 10 years.

But demand for staff continued to rise at a marked pace in March, with the rate of expansion only just shy of January's 15½-year high.

"The data shows that demand for staff continues to rise," said Bernard Brown, partner and Head of Business Services at KPMG.

"Marginally up on the figures for February, the latest data suggests that engineering, construction and IT are the sectors hungriest for talent.

"It's all good news, but the next step will be for candidates to put themselves forward for the role on offer – something they still seem unwilling to do."

The research comes after the Chancellor George Osborne pledged that a future Conservative government would secure "full employment" for workers in the UK.

The findings also follow the country's Consumer Prices Index (CPI) inflation rate dropping to 1.7% in the three months to February, bringing it closer to annual wage growth of 1.4%.