Services employment at seven-year high

In the three months to May, 48 per cent of companies said employee numbers were up, while 6 per cent said they were down, giving a balance of plus 43 - the highest figure since November 2007.

The survey of 174 firms found that a balance of plus 24 businesses had already increased staff numbers over the last three months.

Also, in the business and professional services sector - covering accountancy, legal and marketing firms - workload volumes jumped at their fastest in almost a decade, resulting in profits growing at their quickest pace since late 2007.

But an above-average number of firms reported labour availability as a constraint on investment, while skills shortages increasingly affect expansion plans in the business and professional services sector.

However, CBI director for economics Rain Newton-Smith said: “Strong confidence and activity in the services sector reinforces our view that weaker growth over the first quarter of 2015 will prove temporary.

“Prospects for consumer services remain buoyant, as real incomes rise supported by low inflation and strong employment, fuelling spending in bars, hotels and restaurants.

She added: “But concerns about skills shortages are increasing in both sectors, particularly among business and professional services firms looking to expand.”

Yesterday, official figures confirmed that UK gross domestic product increased by 0.3 per cent in the first three months of 2015, half of its rate in the fourth quarter of last year, and the worst performance since the end of 2012, scotching hopes for an upward revision.

The figures from the Office for National Statistics showed that the powerhouse services sector, representing more than three-quarters of UK output, had a more sluggish three months than first estimated.