GRADUATE salaries are expected to reach record levels this year, with some university leavers earning more than £35,000 as investment bankers, lawyers or oil executives.

Employers forecast 14.5 per cent more vacancies, with an increase in the overall value of starting salaries of 4.8 per cent, or £1,000, the highest year-on-year increase since 2001, according to the Association of Graduate Recruiters. Most vacancies will be found in London and the South East.

While the growth in vacancies and the rise in median salaries to £22,000 indicate a booming economy, the survey of 226 leading employers shows concern about the lack of quality applicants.

Carl Gilleard, chief executive of the association, said that the sustained increase in graduate jobs suggested that business confidence was high. “Predicted salary increases of 4.8 per cent are very generous and indicate that employers continue to recognise the value that top graduates bring to businesses. It also suggests that among recruiters competition for the best graduates is intensifying.”

Therefore, he said, it was surprising that some employers found that they were not receiving as many high-quality applications as they needed.

“The report should act as a wake-up call to the graduate class of 2005,” Mr Gilleard said. “They should seriously consider taking advantage of the buoyant graduate vacancy market now.”

Although the growth in vacancies has slowed by 1 per cent from 15.5 per cent last year, the sustained demand for graduates appears to contradict fears of a graduate glut.

Most of the emerging graduate jobs are centred in a few fields, such as accountancy, investment banking, the public sector and law, where graduate numbers are expected to increase by between a quarter and a third.

The same firms are also offering the highest starting salaries and bonuses. The survey indicates that there are likely to be 500 more jobs with association employers paying £30,000 or above to new recruits, with three organisations planning to raise their starting salaries to more than £35,000. At the lower end, some firms are still offering as little as £15,000, and 60 per cent of employers said they would offer starting salaries of between £17,500 and £ 22,500.

If, by 2010, the Government achieves its aim of having 50 per cent of all school-leavers taking part in further education, there could be an extra 250,000 graduates.

Last year 325,400 graduates left higher education, compared with 308,400 in 2002 and 303,800 in 2001. However, while the overall numbers of graduates rose, the numbers finding permanent work dropped from 164,000 in 2001 to 159,100 last year.

The highest earners are still graduates going into investment banking who can earn as much as £35,000 when they start work. Next are management consultants and lawyers who can earn upwards of £28,500, followed by oil companies where the median salary offered is around £25,300.

Aspiring oil executives earn just £300 more than a graduate entering the Armed Forces, who at a salary of £25,000 will earn around £5,000 more than the average salary of first-year accountants. However accountancy firms also offer three years’ training and a further qualification.

At the bottom end of the scale, graduate retailers could start on as little as £19,000 falling to £13,700 if they work for insurance companies.

Explore Education

• Schools

• GCSE and A Level

• Good University Guide

• Sunday Times University Guide

• Student

• Young Times

• School Gate

Times recommends

• University black hole as applicants surge
• Students to be offered 'no-fee degrees'
• 'White flight' causing school segregation