CBI: UK service sector firms show cautious optimism

| May 26, 2011 | 0 Comments

A survey by the CBI has revealed consumer service firms have been hit by a cut back on spending.

According to the CBI, firms such as hotels, bars and restaurants, saw evidence of weak demand but are optimistic about future prospects as conditions are not expected to be as challenging in the coming quarter.

Meanwhile, business services firms, which include accountancy and marketing, experienced “modest” growth with expectations the highest for three years and jobs are expected to be created in this area.

Yesterday, the Office for National Statistics revealed household spending contracted by 0.6% in the first quarter – the largest fall since the second quarter of 2009 when the economy was in the midst of recession.

Households are suffering amid rising inflation, tax hikes and Government spending cuts.

Ian McCafferty, the CBI’s chief economic adviser, said: “When times are tough, consumers cut back their discretionary spending on holidays, leisure pursuits and meals out, and we are seeing that rising prices and squeezed incomes are holding back household spending.”

The survey was conducted between 27 April and 18 May and questioned 175 firms.

Tags: , , , , ,

Comments (0)

Trackback URL | Comments RSS Feed

There are no comments yet. Why not be the first to speak your mind.

Leave a Reply

Visited 1115 times, 5 so far today