Michael Page, the recruitment group, sent alarm bells ringing across its sector yesterday by giving warning that it was engaging fewer employees itself because the credit crunch was forcing clients in the UK to limit hiring of staff.

Steve Ingham, chief executive, said that the group's UK business, which accounts for more than a third of profits, had started to experience a “weakening” in growth.

The company, which specialises in high-margin professional and permanent staffing, was affected by the early Easter. It said that it had also been hit by “further weakening of the banking sector”, which had also affected some of its other disciplines that service banking clients.

Profits in the UK, expected by most analysts to rise by about 11 per cent in the first three months of the year, rose by only 6.7 per cent, from the same period of last year, to £47.1 million.

Michael Page shares closed down 16p, or 5.3 per cent, at 288p. Several investment banks in the City, such as UBS and Citigroup, are expected to make huge job cuts after writing off billions of pounds of soured investments.

Looking ahead, Mr Ingham said: “Whilst we continue to experience strong activity levels and demand for talent, in certain areas there are signs of more cautionary behaviour.”

Mr Ingham said that he would not, therefore, be adding staff in areas likeliest to be affected, particularly in Britain, but would continue to invest in new recruitment consultants in faster-growing areas.

The Asia Pacific region continued to raise profits strongly, he said. A slowdown in Tokyo, where banking was suffering, had been offset by growth in China and Hong Kong.

Mr Ingham added that Michael Page's fledgeling US region had managed to see off the banking slowdown by increasing its market share.

The group, which has about 150 offices in 25 countries, said that all non-financial sectors were growing strongly around the world.

First-quarter gross profit growth across Michael Page was above forecasts, up 33 per cent to £140 million.

Michael Page shares have fallen 46percent in the past year as worries about the weakening global economy have taken hold, but have risen about 15 per cent since the start of this year.

Investec Securities said that Page's results were strong. Robert Morton, an analyst, said: “Whilst there is clearly considerable uncertainty over the outlook for the recruitment sector in the short term, management is strong and the group's geographical diversity is enabling it to show further growth.”

Hays, the rival recruiter and due to issue a trading update on Thursday, fell by 7p, or 5.9 per cent, to 111p.

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