Temporary labour rates for clerical, IT and professional roles have risen by 9.6 per cent reflecting 2011’s increase in VAT (which increased from 17.5 to 20 per cent this year) and National Insurance.

This compares to a rise of only 2.5 per cent in the US. In 2010, UK rates rose 3.9 per cent whilst US rate were almost flat, up only 0.1 per cent for the year.

The data from research firm IQNavigator was based on hourly rates paid to staffing agencies by private-sector enterprises.

‘This report shows that despite the UK economy softening, cost pressures from VAT and NI rises, and general inflationary pressure, are leading to significant increases this year in the rates paid for interim staff,’ says Peter Smith, editor of Spend Matters UK/Europe.

IQNavigator projects that in the period from January 2010 to October 2011 the UK experienced a 3.8 per cent annual rate of inflation and its report says: ‘The rise in inflation explains a significant part of the increase in UK labour rates.’

Smith adds: ‘Hiring firms need to be looking at what they can do to moderate such increases.’