UK hiring and pay growth slow in October

London - Permanent hirings by British firms via recruitment companies rose at the slowest pace in nearly a year in October and growth in starting salaries also weakened, a survey showed on Friday.

The signs of a cooling in Britain's labour market will be noted at the Bank of England which has put wage growth at the centre of the debate on when to start increasing interest rates.

The Recruitment and Employment Confederation (REC) and KPMG said permanent hirings last month grew at their slowest pace since November 2013 and the rise in temporary hirings was the slowest since June of last year.

Permanent staff salaries rose at the weakest rate since February while pay for temporary and contract staff slowed to a five-month low, according to the monthly REC/KPMG survey which is produced by financial data firm Markit.

Britain's unemployment rate tumbled to 6% in the three months to August, down from 7.7% a year earlier, although average weekly earnings, the broadest measure of pay growth, has to pick up.

Kevin Green, chief executive at REC, said employers were now unsure about the impact of a ruling this week by a British employment tribunal that companies should factor in overtime when calculating holiday pay for staff.

He also urged the government not to take measures that would make it harder for skilled foreign workers to come to Britain.

"Ongoing candidate shortages are a major barrier to growth," Green said in a statement. "Despite the political sensitivities around immigration, the reality is that we need to bring in more skilled workers not fewer."

Prime Minister David Cameron, seeking to counter the rise of the anti-European Union UK Independence Party (UKIP), is considering ways to curb immigration from within the bloc if he wins next May's general election.