Michael Page announced an increase in profits for the third quarter but warned that economic conditions made market conditions “increasingly challenging”. Group gross profit rose 14.6% (3.9% at constant rates of exchange).

However, UK gross profit dropped by 8.3% to £44.9m.

In response to weakening market conditions, group headcount decreased by 84 in Q3 to 5,452 overall. Within the UK, headcount fell by 76 to 1,787, all from natural attrition.

The company said it anticipated that its headcount would reduce further during the fourth quarter if general market conditions continue to weaken.

Commenting on the third quarter trading, Steve Ingham, chief executive, 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. As anticipated, our businesses have reacted quickly by reducing headcount through natural attrition where activity levels are slowing, such as the UK and North America.

“While the outlook is likely to become more challenging in some of our markets, our discipline and geographic diversity is underpinning the resilience of our overall business and we will continue to increase this diversity by cautiously investing in existing and new markets."