IT contractors received a boost today with news that demand for IT contracting staff continues to rise, a leading recruitment group has claimed.

Growth in demand for staff has grown again for the fifth month in a row, with the rate of increase at its highest level for two-and-a-half years, according to the Recruitment & Employment Confederation (REC).

The IT sector is seeing "particularly strong growth", said to Kevin Green, the REC's chief executive.

Rates of pay for contractors and the supply of candidates ready to fill vacancies also increased, but at a slower rate than in previous months.

"Increasing employer confidence has resulted in the best performance we've seen in permanent employment for two and a half years," Mr Green added.

However, the REC warns that predicted cuts in public sector budgets will have a big impact this year.

Last week the REC called for reform of public sector resourcing, with Mr Green claiming that flexible working should be "part of the solution rather than part of the problem".