The CBI poll showed business optimism was falling in the consumer and business services sectors and that cost pressures and falling prices could squeeze company profits.

Travel agents reported a fall in business optimism

The survey which covers accountants, advertisers, hotels and other service sectors, shows business grew in the last three months, but confidence about the future deteriorated.

Consumer services companies, such as bars, travel agencies and hotels reported increased job losses and falling confidence, although employment remained strong in the business and professional sector.

Over the coming months a balance of 17% of business and professional services firms expected business to grow compared with a balance of minus 1% of consumer firms.

This showed a marked pessimism compared with the experience of the last quarter which saw positive balances of 23% among business and professional firms and 7% among consumer companies.

Pessimism growing

Sudhir Junankar, CBI's associate director of economic analysis, said: "This snapshot shows that weakening confidence among firms in other sectors of the economy is now shared by those in the consumer, business and professional services.

"Although these sectors have seen an increase in the amount of business they do, those reliant on ordinary consumers are not expecting this to continue.

"This survey suggests that cost pressures and falling prices may squeeze company profits across the consumer, business and professional services."

Martin Scicluna, chairman of Deloitte and Touche, which sponsored the survey, said: "Consumer services firms are far less optimistic than those in the business and professional services.

"They expect the volume of business to be lower and to see a sharp cut in the value of future business, so it is not surprising that consumer services companies expect to continue cutting jobs."