The UK job market is entering a critical phase of its recovery, according to accountancy firm KPMG. The latest Recruitment and Employment Confederation and KPMG Report on Jobs suggests that while both permanent and temporary positions were created last month, the rate of growth was lower than the three-month high recorded in November. However, demand for permanent staff still managed to outstrip supply, pushing staff wages higher as employers fought for the best candidates. Bernard Brown, partner and head of business services at KPMG said: "The latest data suggests again that the UK job market is on the road to recovery as growth of permanent placements remained solid and demand for staff rose strongly. “Whilst demand has been strong, we are entering a critical phase for the UK job market with two big question marks. First, the impact of government cut backs in public sector spend and employment, which should start to bite over the coming months. Second, the impact of the recent VAT increase and whether this will affect UK consumer demand and job creation.”