Accountancy group BDO has said that because of the weak service sector the UK economy could witness a contraction this year. BDO's output index, measuring company turnover expectations for the next three months, fell from 93.3 in September to 92.6 in October.

The same survey also highlighted a worsening labour market with the employment index falling from 95.9 in September to 93.4 in October. To put it into context, any rating under 95 relates to a performance below the normal trend. On a more positive note, however, a small increase in optimism, especially in manufacturing, was seen in the index.

Peter Hemington, a  partner at BDO, says, "Despite official GDP figures of Q3 [growth] exceeding  expectations, the UK's economic recovery remains sluggish and we could  already be entering a period of negative growth."