The Service sector accounts for around two-thirds of UK economic activity and employment in the sector showed a “fractional decline”. Output charges have also dropped in an attempt to win new business
Many firms that had won new business said it had been hard to win contracts, as most companies are unwilling to commit to projects at a time of such economic uncertainty.
The survey also revealed that companies have started to use discounting practices for the first time in more than a year to try and establish new business.
Chris Williamson, Chief Economist at survey compilers Markit said: “Another rather disappointing survey adds to fears that the UK recovery continued to lose momentum at the start of the fourth quarter.
“Growth in the vast service sector, which accounts for almost two-thirds of economic activity in the UK, slowed to a worryingly lacklustre pace in October. The sector made a strong contribution to economic growth in the third quarter, but this looks set to wane in the final quarter of the year.”
Howard Archer, Chief UK & European Economist for IHS Global Insight said: “While the services purchasing managers’ survey did not deliver a knock-out blow to fourth quarter growth hopes, the economy is clearly on the ropes and recession is a serious threat.”
Despite slowing growth – anything above 50 marks growth - in activity business, expectations among services companies rose to 68.5 in October, from 63.5 in September.
"For more information, please contact Glazers, Chartered Accountants London or visit www.glazers.co.uk
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