Image copyright AFP Image caption BDO said services firms, in particular, planned to hire more staff

UK firms intend to hire staff at the fastest rate for 16 years, research suggests.

Accountancy firm BDO said its jobs index for July, which measures hiring plans over the next three months, was at its highest level since 1998.

A "significant uptick" in hiring plans by services firm in particular was driving the increase, BDO said.

An increase in the rate of job creation is expected for the rest of the year, the survey found.

BDO's optimism index - which measures businesses' expectations over the next six months - was at its highest level for more than a year in July.

"The unprecedented growth we've seen in UK employment this year looks set to continue," said BDO partner Peter Hemington.

But he warned that some services firms were already citing concerns over a shortage of skilled workers, and said "readily available and flexible labour from Europe" could help to relieve short-term pressure on businesses.

"To address this, the government must ensure its protectionist tendencies are put on hold until productivity returns to pre-crisis levels," he added.