Pay rates and job vacancies are increasing as the economic recovery takes hold, according to new research.

Employment group Reed said advertised salaries were around three per cent higher last month than a year ago at just over £27,000.

The biggest pay deals on offer were in manufacturing, human resources, technology and banking.

The highest median advertised pay rates were in London, Liverpool, Birmingham and Edinburgh.

Mark Rhodes, marketing director of reed.co.uk, said: "UK jobseekers have started 2016 by increasing their aspirations and applying for better paying positions than last year.

"While businesses continue to grow steadily, many employers are offering higher salaries to secure the talent they need to support their ambitions.

"However, our latest figures suggest that candidates are selling themselves short and actually expect to earn less than what companies are willing to offer.

"For anyone who's been sitting tight whilst the recovery takes hold, now is a great time to make a move and improve their earnings."

Employment minister Priti Patel said: "Employment is at an all-time high with more than half-a-million more people now in work compared to a year ago. With wages continuing to grow strongly, up two per cent over the last year, and record numbers of job vacancies, there are a wealth of opportunities being created for people who want to get on."