Service sector blamed for drop in UK output

The slowing growth of the services sector is adversely impacting UK business output, according to a report by accountants BDO.

The firm’s monthly measurement of UK business output recorded a fall in May driven by the sluggish growth of the services sector which makes up the majority of the UK’S economic output.

Optimism among firms for the next six months also fell to its lowest level since March 2017. The latest results follow a poor first quarter in which the UK economy grew just 0.1 per cent while business investment contracted. Consumer spending also slowed, held back by high household debt, stagnating wages and adverse weather.

Martin Gill, lead partner of BDO in Scotland, said: “The UK economy is struggling to pick up the pace of growth. Business output is slowing and consumers are continuing to tighten their purse strings as they feel the pressure of rising prices.”