UPDATE 1-Strong UK hiring data may increase rate rise prospects
* UK permanent hiring rising fastest since 2010-survey
* Recruiter Hays UK net fees up 10 pct
* Both see evidence of wage rises, market tightening
LONDON, Jan 9 (Reuters) - Companies in Britain are hiring permanent staff at the fastest rate in almost four years, figures released on Thursday showed, increasing the chance that unemployment will fall to the key 7 percent level sooner than the Bank of England (BoE) expects.
The BoE committed in August to keep interest rates at a record low of 0.5 percent at least until the jobless rate falls to 7 percent, which it thought might take three years.
But unemployment has fallen much faster than the BoE forecast, reaching 7.4 percent in the three months to October and prompting the central bank to predict it could hit 7 percent as early as the end of this year.
A survey by the Recruitment and Employment Confederation (REC), which represents the staffing and recruitment industry, showed employers are hiring permanent workers at their fastest rate since March 2010, with wages rising and temporary hiring at a 15-year record.
Strength in the labour market was confirmed by an update from Britain's largest specialist recruiter Hays Plc, showing net fees in the UK grew 10 percent in the three months to end December.
Hays, whose main rivals include Michael Page and Robert Walters and which places workers in areas such as finance, IT and property, said permanent job placements grew faster than temporary ones in the UK for the first time in six years, driven by candidate confidence and increased hiring by small and medium sized business.
"We're now seeing a real pick-up in people in work looking to change jobs," Hays Finance Director Paul Venables said. "It's a real sign that we've moved out of a fragile recovery into something much more meaningful."
Walters had said on Wednesday its UK fees grew 18 percent, buoyed by temporary and regional hiring.
LABOUR MARKET TIGHTENING
Trends in the REC survey do not match perfectly with those in official unemployment data, as the figures do not directly capture changes in the size of the workforce or jobs being cut. They are also not representative of all employers.
But the REC data does suggest the labour market is tightening, with the biggest decline in the availability of permanent staff since November 2004.
"The real concern now is the mismatch between demand and supply, with recruiters reporting that they can't source suitable candidates for vacancies," Kate Shoesmith, REC's director of policy, said, citing shortages of accountants and sales staff.
Venables said he had seen some tightening in UK construction and property, where Hays' fees rose 21 percent in the second quarter, originally just in housebuilding but increasingly across commercial construction.
"We saw a big uplift in retail development (and) quite a big uplift in some infrastructure projects coming online," Venables said. "We've hired for our clients more architects in the last six months than in the previous four years."
Venables noted a tighter labour market is "fabulous" for recruitment companies as it leads to wage inflation and creates demand for them to use their skills to seek out new candidates.
He said he had started to see wage inflation in the last two quarters, with existing employees getting pay rises of between 2 and 3 percent and those that move jobs getting salary increases of more than 10 percent.
The REC survey also showed the biggest rise in starting salaries since October 2007, welcome news to many Britons whose wages rose by less than half the rate of inflation last year.
But this is likely to be of more concern to the Bank of England. Seven percent unemployment is not an automatic trigger for a rate rise, but one of several factors for considering one is whether wage rises are creating inflation pressures.