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The average salary earned by last year's graduates of the MBA programme at Manchester Business School was 18 per cent up on the previous year, way ahead even of the much-criticised pay rises for Britain's top earning executives.

The 130-strong class of 94 went in to the job market earning an average Pounds 37,800 according to a report published this week by the business school. By contrast, the highest paid directors in the country received salary increases averaging 11 per cent. Research released on Tuesday by the independent Labour Research Department also found that the workforce as a whole had rises of less than 4 per cent.

The career pattern of the Manchester MBA graduates also shows a marked change. More than a quarter were recruited by the finance and business sector compared to 16 per cent in the previous year. Peter Barrar, Manchester's MBA programme director, said: "Confidence seems to be returning in this sector."

The most popular job among the graduates was business strategy, followed by sales and marketing. Professor Barrar said that half took jobs abroad, particularly in China and India, and put their apparent success down to the value of an MBA from one of the top four business schools. "Really good people are always hard to find and there is a lot of competition for the best."

Professor Barrar said a 15-month MBA at Manchester cost Pounds 30,000 excluding loss of earnings. "No doubt our students are highly motivated and the prospect of failure is appalling," he said.

About 20 per cent of students are sponsored and the rest are self-financing, said Professor Barrar. Research in the United States had shown that an MBA was only of "significant benefit" from a top-20 school. It was of arguable benefit if from one of the middle-20 schools and was a poor investment at any "unknown" institution. In the UK, Professor Barrar said, an MBA was only a good investment from one of a small and select group of schools.