Business sector remains on track yet consumer services face tight squeeze

THE UK service sector is set for a two-speed recovery, with business services bouncing back but customer services still being squeezed.

Business and professional services have reported rising activity for the last six months, according to a Confederation of British Industry (CBI) survey released today.

Customer services, however, have been hit by five consecutive quarters of decline, the survey showed.

“When times are tough, consumers cut back their discretionary spending on holidays, leisure pursuits and meals out, and we are seeing that rising prices and squeezed incomes are holding back household spending,” said CBI economist Ian McCafferty.

A positive balance of 10 per cent of respondents in business services expect their companies to expand in the coming year. The value of business in this sub-sector grew at its fastest since November 2007, the survey said.