UK services hit by living wage fears and global growth jitters

Expectations for business activity over next 12 months slumps to near three-year low in the face of growing uncertainties

The impact of government spending cuts, jittery world markets and the prospect of an EU referendum vote have dragged down expectations of UK services growth this year.

The sector, which accounts for more than three-quarters of economic activity and ranges from shops and hotels to banking, maintained its solid growth in the run-up to Christmas, but a survey found that expectations for business activity over the next 12 months was the weakest for almost three years.