News Article - 29 May 2008
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The global credit crunch is having a particularly detrimental effect on services businesses in Britain, but accounting software can help firms weather the economic downturn.

According to Ian McCafferty, chief economic adviser to the Confederation of British Industry, businesses in the hospitality industry, such as hotels, bars, cinemas and restaurants, have been hardest hit by the current economic slump with many reporting a "worse quarter than they had feared".

He explained: "Consumers are reining in spending on leisure, entertainment and eating out, while professionals offering services such as accountancy, property and law have seen their profits flatten off as costs continue to grow strongly."

According to employers' group the CBI, the fall in business activity for services firms is the sharpest since 2001, with profitability at its lowest rate since the survey began in 1998.

The quarterly survey of the service sector by the CBI indicates that only travel businesses witnessed a rise in activity over the past quarter.

Rising costs of food and fuel are placing increased pressure on household finances and employment in the services sector appears to have fallen for the second quarter in a row.

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