Suffolk's booming logistics sector is driving faster than average wage growth in East Anglia, but there are warnings the bubble could soon burst.

According to a study by experts at job board Reed, wages in the region have grown by 3.4% compared to 0.4% on average in the country. Bosses put the growth down to the booming logistics sector around Felixstowe.

This still lags behind inflation. The Office for Budget Responsibility (OBR) predicted inflation will now average 7.4% this year and peak at 8.7% in the fourth quarter.

Matthew White, Reed’s regional managing director for East Anglia, said: “East Anglia has seen an increase in salaries above and beyond the national average, particularly driven by the huge rise in salaries in the supply chain sector in the region.

“Supply chain is becoming a huge issue for the UK as a whole, but Felixstowe is key to the sector as the UK’s busiest container port, and this is driving salaries in the East Anglia region as businesses scramble to hire the right skills.

“Despite this, the overall rise in salaries in East Anglia is still in the face of soaring living costs and some industries in the area are seeing salaries stagnate or decrease.

"Like many other regions of the UK, it’s a fiercely competitive market for talent at the minute and businesses looking to hire professionals may need to review their packages to stand out.”

Commenting on the findings, Paul Simon, head of public affairs and strategic communications at Suffolk Chamber of Commerce, said: “We think that the Reed research actually underestimates the overall growth in wages experienced in the last 12 months as their data excludes salary increases offered to retain existing staff.

“That said, the experiences of our members certainly supports the contention that some of the highest salary increases have been in the logistics and transport sector.

“Whilst Suffolk employers are doing everything they can to retain and recruit staff through a combination of improving wages, non-pecuniary benefits and flexible working practices, the overall squeeze on company cashflow from increases in raw material, component and energy costs as well as new government taxes means that some businesses will soon be reaching their breaking point.

“So, Suffolk Chamber whilst welcoming the increase in wages in the county is concerned about the sustainability of such a trend over the medium term.”