DEMAND for workers in the North increased its strongest pace in nearly 16 years in December, a report has revealed.

A KPMG survey said there were higher numbers of staff in permanent positions in December, with temporary and contract posts also rising sharply.

The report says demand for temporary staff rose at its fastest pace for about 16 years, with average permanent salaries rising at their strongest pace for more than six years.

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Mick Thompson, office senior partner at KPMG, in Newcastle, said: “The new year has brought with it fresh confidence among the regional business community, highlighted by continued strong growth in both permanent and temporary staff placements.

“With demand for workers across the North outpacing the UK average, it’s clear the recovery is now starting to gain some momentum.

“Nevertheless, confidence will remain delicate until exports show stronger growth, so employers and individuals will be keeping an eye on interest rates and the impact any changes have on the pound in their pocket before deciding whether a new job is the way to go.

“Uncertainty also remains because the availability of staff to fill roles has seen a steep fall.

“There is a risk that should this trend continue, employers who are desperate to fill a gap could become stretched beyond their means, at the same time as over-inflating the market by offering high salaries just to tempt employees to move.”