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28.08.201807:18:00UTC+00UK Service Sector Profitability Weakens On Cost Pressure: CBI

Strong cost pressures hit the UK service sector profitability in three months to August, the Services Sector Survey from the Confederation of British Industry showed Tuesday.

Profitability in business and professional services sector and the consumer services sector failed to improve. The balance came in at 1 percent in business & professional services, while it fell to -18 percent in consumer services.

The growth in business volume in business and professional services eased, with the balance falling to 14 percent from 25 percent in May. Growth is forecast to weaken further in three months to November, to 6 percent.

In consumer services, growth in business volume bounced back. The corresponding balance rose to 7 percent from -12 percent in the previous quarter. For three months to November, the score came in at 6 percent.

The underlying challenges facing the sector are not going away any time soon, Rain Newton-Smith, CBI chief economist, said. Demand growth is expected to remain subdued next quarter and firms seem hesitant over the prospects for expanding their businesses in the year ahead.



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