This year’s crop of university leavers are earning an average starting salary of around £20,800, according to the latest First Rung: Graduate Pay Trends report from management consultancy Hay Group.

The study, based on information from public and private sector employers throughout the UK, places the average graduate starting salary at £20,812.

It found that despite a rise of 2.5% since 2006, wage inflation for university leavers continues to lag behind national levels of 3.5% over the last year, the report finds.

The Hay Group research reveals that for the second year running, starter salaries in the public sector are racing ahead of those offered in the private sector. The average salary for a graduate joining the civil service in 2007 will be £21,885 – 3.1% above the average private sector wage of £21,223. Only those seeking work this year in the lucrative oil industry can expect to earn a higher average starting salary, with packages pitched at over £25,227.

Juan Novoa, reward analyst at Hay Group and author of the report, says: “Despite the increasing number of graduates in the job market, companies are still struggling to recruit graduates with the right mix of skills and competencies. Rather than attracting candidates with high salaries, many companies are now marketing a total package, based on bonuses, benefits and comprehensive training programmes to ensure their graduate intake develops the right skills to be fit for the future.”

Graduates working in London continue to command the highest starting salaries at £24,333, up 7% since last year. The South East is also a relatively lucrative region for graduates, boasting an average starting salary of £21,022.

Scotland, however, has fallen significantly down the graduate pay ladder since 2006. The region now comes in at a poor ninth in the graduate pay table for this year, with typical starting salaries pitched at 2.2% below the national average at £20,354.