Michael Page, the UK recruitment company, which last month rejected a bid from Swiss rival Adecco, reported a 14.6 per cent increase in third-quarter gross profit to £141.4 million but added that it expected a tough outlook for the UK jobs market.

Business in Europe, the Middle East and Africa drove profit growth, with gross profit up 31.8 per cent to £63.7 million. The profits at the UK business, which comprises 32 per cent of the group, fell by 8.3 per cent to £44.9 million as the demand for financial sector workers lessened.

Michael Page, which rejected a £1.3 billion takeover offer from its Swiss rival, said more lucrative permanent placements delivered year-on-year gross profit growth of 13.5 per cent, with profit from temporary hires growing by 18.5 per cent during the period.

The company has reduced its headcount in the UK and US as activity levels slow there.

Steve Ingham, chief executive of Michael Page, said: “Market conditions through the third quarter became increasingly challenging. The unprecedented turmoil in the financial sector during September has eroded confidence in the wider economy. This has reduced activity levels and increased the cautionary candidate and client behaviour we started to encounter in the first half of 2008, further reducing our visibility.”

The shares slid 9.4 per cent to 209p after the announcement.

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