UK service sector shrinks

There are fears over the economy after figures suggested the service sector shrank last month for the first time in two years. It comes after disappointing construction figures yesterday.

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Poor service figures raise 'likelihood of recession'

Service sector firms reported a slide in new work in December amid budget constraints and a lack of confidence, which was the second back-to-back decrease in new work since mid 2009.

Bad weather was also thought to have been a factor behind the overall contraction in the services sector as Britain was hit by persistent rain.

Poor service sectors figures will raise 'likelihood of recession' Credit: Chris Young/PA

Chris Williamson, chief economist at Markit, said the service sector blow "raises the likelihood that the UK economy is sliding back into recession".

The UK would have to suffer two consecutive quarters in a row of declining output to be officially declared back in recession.

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