Service sector confidence hits three-year low, CBI survey finds
By Benjamin Chiou
Date: Monday 01 Dec 2025
(Sharecast News) - Confidence levels and business activity across the UK services sector have both deteriorated over the past three months, according to a survey out on Monday by the Confederation of British Industry.
Optimism about general business conditions fell for the fifth straight quarter over the three months to November, dropping to a net balance - those reporting an increase minus those reporting a decrease - of minus 50%, down from -29% over the three months to August. That was the worst level in three years.
The decline in business volumes also quickened to -38% from -34%, with firms predicting further falls, albeit at a slower rate, over the quarter ahead - the net balance on volumes is tipped to be -23% for the three months to February.
Notably, average selling prices across the services sector were unchanged during the period, having registered a net balance of +4% the preceding three months, marking the first time selling prices haven't increased over a quarter since the first half of 2021.
As a result, business profitability and employment fell sharply, particularly in the consumer services industry. The profitability gauge came in at -44%, its lowest since August 2020, while the headcount measure was more or less unchanged -21%.
"Our latest survey reveals that the services sector is still under significant pressure. Business sentiment and activity have continued to fall, while rising costs are outstripping price growth, continuing to squeeze margins. As a result, profitability has dropped sharply once again," said Charlotte Dandy, economic surveys and data manager at the CBI.
Dandy said that last week's Autumn Budget will add further pressure on bottom lines in the services sector, particularly the addition of NICs to salary sacrifice pension contributions as well as business energy costs.
"The government must now leverage enterprise expertise to unlock economic growth. This starts by applying the effective model of compromise and partnership achieved on the Employment Rights Bill, by collaborating directly with business to boost growth."
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