Hopes that the UK may be past the very worst of the recession have been supported by news that activity in the services sector, which dominates Britain’s economy, is starting to stabilise.

The sector, encompassing everything from accountancy and finance to hotels and travel, is still in deep recession, according to the CBI’s latest quarterly survey, published today. However, sentiment is starting to improve, and business activity may have troughed.

The survey shows that business volumes in consumer services are falling at the fastest rate since 2001, while those in the business and professional sector are dropping even faster.

Just as significantly, the figures underline the fact that despite the dramatic efforts by both the Government and Bank of England to pump extra liquidity into the system and support banks, firms are still struggling to borrow. In particular, 31% of consumer services firms said the lack of available credit was constraining their ability to increase business in the coming year – the highest level since the survey started in November 1998.

Daily Telegraph, Financial Times