Hays sees wage growth of up to 3 percent for British workers

LONDON, Jan 8 (Reuters) - British recruitment firm Hays said it expects wage growth of up to three percent for skilled workers this year, signalling an improvement in the job market and adding to hopes the economic recovery is stabilising.

Pay for workers in Britain has only recently shown signs of picking up after lagging inflation for most of the period since the financial crisis, which saw many of Britain's banks and financial services firms trim costs and cut jobs.

The wage growth of British workers is being closely watched by Prime Minister David Cameron, who is banking on his Conservative Party's reputation for running the economy to carry him to victory in elections in May.

His party is trying to counter the opposition Labour party, which says that five years of stagnant wages and rising prices have left many Britons in a "cost of living crisis". The Bank of England is also keeping a close eye on labour costs as it considers when to start raising interest rates.

Hays Group Finance Director Paul Venables said he expected to see salary increases within a range of 2 to 3 percent across the board, while sectors such as construction, property and IT would command increases of up to 10 percent.

"I think 2 to 3 percent will be the range (of wage growth) for most of the companies we deal with," he told Reuters.

"The higher end will come out of the technical areas, where there's a real acute shortage. We are going to see wage levels there continue to go to the 5-10 percent level," he said.

Hays (LSE: HAS.L - news) , which places workers in areas such as finance, construction and IT, raised its profit guidance for the first half of its financial year after seeing strong demand from Britain, Australia and Asia. (Reporting by Li-mei Hoang; editing by David Clarke)