The UK economy is slowing and will impact on graduate recruitment, business economist Brian Finn warned the audience at the inaugural Targetjobs Breakfast News meeting in London.

"Recruitment advertising in general is highly geared to what is happening in the economy," said Finn, an analyst at Business Economist. He added that figures from the final quarter of last year show that it is slowing down.

And in the financial sector, in particular, there is already anecdotal evidence that salaries for graduate trainees are beginning to be reduced, said Finn. However, projected graduate jobs are unlikely to be less this year and in 2009, according to Carl Gilleard, chief executive of the Association of Graduate Recruiters (AGR).

In a survey of a random sample of AGR members at the beginning of April, 49.2% said they expected the 2008/2009 graduate recruitment intake to be the same as last year.

"Either recruiters are inherently optimistic," Gilleard told the 150-strong audience of graduate recruiters and marketeers, "or they are responding to the changing demands of the economy and employment, ie, the need to target a more graduate-based workforce for the skills required for the future workplace.

"There is little evidence of firms cutting back on graduate numbers due to the skills shortage. The war for talent is still there." Gilleard cautioned recruiters that the recruitment market was "very volatile and could change overnight". He said: "You need to look for the right skills in candidates in this economy. Today's graduates show a lack of mobility — not being prepared to move to different parts of the country."

Finn said the slowdown in economies such as the US, the UK and the Euro zone was countered by the rise in GDP in countries such as Russia, India, Argentina and China. "This will affect the demand and supply for graduates worldwide, as these growth countries demand more skilled graduates, from those slowing down," he explained.

Gilleard told Recruiter the state of the economy is crucial to what is happening in graduate recruitment. But he warned that many people in the sector were not keeping pace with what was happening in the economy because they were consuming media in a different way using unregulated blogs and websites to get their news.