RECRUITMENT agencies in Scotland reported an increase in permanent job placements for the second consecutive month in October – however the rate of growth eased and is lagging that of the UK as a whole.

Bank of Scotland's Report on Jobs found that although demand for permanent workers has increased, a number of jobs agencies reported some clients are taking a cautious approach towards hiring.

Temporary placements also rose in October. Although the pace of expansion slowed to a three-month low, it was better than the wider UK.

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There had been worries about the Scottish jobs market after Bank of Scotland's labour market barometer, a composite indictor taking account of various employment surveys, found in July the rate of recovery virtually stalled.

Since then the market has been improving, although the pace of recovery slowed in October.

Donald MacRae, chief economist at Bank of Scotland, said: "The labour market barometer rose in October to its highest level in five months showing a rising number of people in both permanent and temporary jobs and an increase in the number of vacancies.

"Following the low point reached in July, the Scottish labour market is steadily improving in spite of the economic slowdown in the summer months."

At 53.6, up from 52.3 in September, the barometer was slightly higher than its long-run series average of 53.4 and above the equivalent index for the UK.

After a fall in average pay in September, there was a rise in salaries awarded to permanent staff in October. However, the increase was, the bank said "marginal". Temporary hourly pay rates rose but at the weakest pace in four months.