CBI: more job losses for City

FIRMS in the UK business and professional services sector continue to shed staff as financial conditions in 2010 remain tough, according to a CBI survey.

Prices for accountancy, legal and marketing firms have fallen since the New Year leading to a reduction in profits.

Twenty-four per cent of companies said the value of business rose, while 26 per cent said it fell, giving a balance of minus two per cent, statistics from the survey showed.

But firms in the UK consumer services sector, including bars, hotels and restaurants have seen volume and value improve. The rise in selling prices in consumer services has been caused by the increase in VAT at the start of the year.

Ian McCafferty, CBI chief economic adviser, said: “The survey shows that business activity has stabilised across the service sector, however the fortunes of the Consumer Services and the Business and Professional Services differ, with firms selling to households doing slightly better over the past three months.”

The survey said firms in consumer services plan to expand their businesses this year although this could be hampered by an inability to raise funds.

“Overall, these figures are consistent with our view that the economy is recovering slowly, but that we will have to wait for a while before growth picks up,” McCafferty added.

Last week UK retailers posted their strongest growth in sales volumes for two years, defying analyst’s predictions.

Retailers expect 16 per cent further growth next month, compared with last March.