Job losses in the service sector are expected to accelerate as the economic downturn deepens, according to the CBI.

The employers' organisation with a regional HQ in Sevenoaks found that services are as vulnerable to recession as manufacturing.

The CBI’s quarterly Service Sector survey covers 195 companies operating in the service sector, across business and professional services, such as accountancy and legal firms, and consumer services, which include hotels, bars and restaurants, travel and leisure.

In the three months to November, firms reported steep falls in business volumes and profitability, as well as plans to cut jobs and investment.

In the leisure and personal care sub-sector, the number of people employed fell at the fastest rate for two years and is expected to fall slightly faster in the next quarter.

Firms selling services to businesses saw the volume and value of their business, profitability and numbers employed fall at record rates - the steepest declines since the survey began in 1998.

A record number of firms claimed the cost of finance was likely to limit capital expenditure next year.

CBI south east regional director Malcolm Hyde said: "Recent economic data has highlighted just how rapidly the economy is weakening. With consumers continuing to tighten their belts, companies operating in consumer services, such as leisure and personal care, are continuing to find trading conditions very challenging.

"With a record number of consumer services companies worried about the cost of credit, we need to see lending conditions improve as a matter of urgency.

"As the recession deepens, firms are reducing business-to-business spending at a sharper rate, and as a result the decline in volumes and profits in business and professional services is expected to accelerate over the months ahead.

"So far, job losses have been relatively small across the whole of the service sector, but with firms predicting faster falls in volumes, values and profitability in the next quarter, we can expect to see significant job losses in the coming months."