Hays, which specialises in skilled jobs in areas like accounting and construction, reported quarter-on-quarter growth in net fees at its UK business for the first time in about two years and said full-year earnings would be at the top end of analysts' forecasts, sending its shares 6 percent higher.

"This is not a roaring back of the UK economy ... but consistently we are seeing some real signs from our small and medium sized companies that they're looking to hire a few more people, mainly temps," Finance Director Paul Venables said.

Britain's economy has been in the doldrums since the 2008 financial crisis, and appeared on the verge of falling back into recession for the third time in less than five years until recent data suggested it may just avoid that fate.

One comparative bright spot has been the jobs market, which has held up better than most economists expected, with unemployment standing at a 20-month low in February.

The recruitment sector is more a barometer of confidence than new job creation as it is driven mainly by employees choosing to move between jobs.

Signs that workers are increasingly willing to apply for new positions tends to indicate a wider increase in confidence about the future. Hays' results chime with an improvement in UK consumer sentiment in March.

"We are beginning to see some growth in what I would classify as the economic heartlands of the UK," Venables told Reuters in a telephone interview.

"We're beginning to see people in the provincial areas that haven't changed jobs for four, five, six years now looking for change," he said, predicting Hays would return to "meaningful" growth in the UK in the next quarter.

The modest, sequential growth in Hays' UK business in the three months ended March, its fiscal third quarter, was driven by strong performances in construction in Yorkshire and Scotland, along with jobs such as accounting and finance in southern England, Venables said.

There were signs the construction and property sectors were starting to benefit from government schemes to encourage banks to lend to prospective housebuyers, he added.

With its focus on skilled jobs, however, Hays can only show part of the picture. The most recent survey by Britain's Recruitment and Employment Federation and KPMG showed the slowest expansion in new job placements was in lower paid, unskilled sectors.

"While it would be remiss of us to characterise this as a robust wave of recovery emanating out from the South East, there is evidence that a patchy revival is underway," Jefferies analyst Kean Marden said in reaction to Hays' trading update.

Britain accounts for around 30 percent of Hays' net fees. It also operates across Asia and continental Europe, with large businesses in Germany and Australia.

Prior to the update, analysts were expecting Hays to post an operating profit of 112.3-122.5 million pounds for the year ending June, the company said.

At 12:55 p.m., Hays shares were up 6.4 percent at 99.4 pence.

(Editing by David Holmes and Mark Potter)

By Christine Murray