Services sector braced for a bleak winter as cost pressures force bosses to cut back investment spending
The dominant services sector is braced for a bleak winter with optimism plummeting as cost pressures mount.
The sector, which covers everything from banking to hospitality, makes up 80 per cent of the economy.
But businesses faced record rises in costs and selling prices in the three months to August, according to the CBI.
Cost crunch: The hospitality sector, which covers everything from banking to hospitality, makes up 80% of the economy
The lobby group’s poll of 199 firms found the increased costs have hit profits and led to bosses cutting back investment spending.
Output for business and professional services firms was flat over the summer, but is expected to ‘fall sharply’ over the next three months, the CBI data showed.
But findings from auditor PwC found that 12 stores closed every day on average in the first half of the year – the lowest level in more than seven years – compared with a peak of 61 a day when Covid struck in 2020.
PwC said the drop in closures was a ‘reason for optimism’. But it has joined the CBI in warning that the outlook is only expected to worsen.