British service sector growth slowed to its weakest in more than four years in November, as worries about the credit crunch depressed new business and confidence to their lowest levels since 2003.
The CIPS/NTC activity index - covering businesses from hotels to financial services - fell to 51.9 in November from 53.1 the month before. This was well below forecasts and was the lowest reading since May 2003. A reading above 50 denotes growth.
The figures showed price pressures accelerating, highlighting a dilemma for the Bank of England as it weighs slowing growth against rising inflation.
NTC said financial services firms recorded outright declines in activity, new business and employment, suggesting that tighter lending conditions are hurting the sector.
Overall, expectations for future business fell to its lowest level in four and a half years, as did the level of new business. But inflation pressures remained strong, with the prices charged index rising to its highest since March, while the input costs index recorded its strongest reading in more than a year.
