UK Economic slowdown hitting service sector - report
The economic slowdown in Britain which has hit manufacturing in recent months, with the loss of thousands of jobs, is spreading to the service sector, a new report warned today.
Profitability and optimism in service firms have fallen at the fastest rate for almost three years in recent weeks, according to a survey of 225 companies for the CBI and accountancy firm Deloitte & Touche.
Falling confidence has spread beyond tourism-related organisations which have been hit by the foot-and-mouth crisis.
‘‘Clearly the economic slowdown facing the UK is now spreading beyond the internationally exposed sectors typified in UK manufacturing,’’ said CBI director general Digby Jones.
The CBI called for a further cut in interest rates to help ‘‘insulate’’ all sectors of UK business from the global slowdown.
But Mr Jones said interest rate reductions alone would not provide the total solution, adding: ‘‘The Government must show it understands the serious threat to job creation. From the climate change levy to restrictive employment legislation, this is no time to add further burdens to business.’’
Roger Bootle, economic adviser to Deloitte & Touche said: ‘‘This survey shows a very sharp fall in confidence in the service sector which powerfully supports the view of those who say the UK economy is slowing sharply.
‘‘The consumer may still be active but business is becoming alarmed about economic prospects.’’
