Service sector activity 'is disappointing'

The Confederation of British Industry (CBI) has argued that the performance of the UK's services sector is very disappointing at the present time.

Consumer services, as well as business and professional services, both reported further falls in business volumes and value in the three months to August.

Previous expectations for stronger activity have failed to materialise, as it was forecast that growth would turn positive in the time frame.

Head of economic analysis at the CBI Anna Leach underlined the fact that business conditions have hardly improved at all, with many firms now more negative about the country's economy than they were three months ago.

She acknowledged that enterprises are selling services to their customers at a very trying time, with price-cost pressures and a weak economy straining profits.

"While business and professional services firms are continuing to see business volumes fall, they have also seen labour costs stabilise, helping to support headcount," the expert remarked.