University graduates are enjoying excellent job prospects with many firms looking to increase their intake this year, according to a report by Incomes Data Services (IDS).

A survey of 100 firms undertaken by IDS found that the number of graduates hired grew by more than 7% in 2005 and is set to rise by another 6% this year, with the biggest areas for growth in finance and manufacturing.

Steve Tatton, the editor of the report, said: “Our research findings show that both graduates and employers are currently facing a win-win situation. Employers can recruit candidates capable of producing future prosperity.”

The average starting salary for graduates with a top degree was £21,415 in 2005 and was expected to rise to £21,688 this year.