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.
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.
More top news
Leicester City have sacked manager Claudio Ranieri less than nine months after he guided them to a historic Premier League title
Around 40 people were in the sports hall at Southwood Middle School in Milton Keynes when the 8ft by 5ft ceiling caved in.
Shaun Walmsley, 28, is on the run after two armed men helped him escape during an escorted hospital visit.