BUSINESS in the UK’s largest sector – services – has unexpectedly fallen at its fastest rate since November 2009, a leading industry survey exposed this morning.
A negative balance of 25 per cent of consumer services firms pointed towards a decline in business volumes over the previous three months.
In business and professional services, meanwhile, the negative balance came in at -22 per cent.
“This quarter we’ve seen more evidence of the ongoing decline in consumer services spending, as people with increasingly squeezed household incomes are forced to cut back their discretionary spending,” said the CBI’s Richard Woolhouse.
“What is new, and was not expected this quarter, is that spending on business and professional services also fell, something not seen since November 2009,” he added.
Despite economic blues in the consumer services sector, analysts had expected some growth in professional services.
Yet professional services firms also expect further decline in the coming three months – the balance of expectations falling to -14 per cent, down from a positive balance of 20 per cent in May’s survey.
The sub-index of optimism in the overall business situation collapsed to -22 per cent, from a positive 23 per cent in May.
Meanwhile, the UK’s GDP outlook was cut to just one per cent for this year (down from 1.1 per cent) and 1.5 per cent for next year, according to IHS Global Insight yesterday.