Profits have been hit in the all-important services sector on the back of a steep rise in costs, even as demand ­remains robust.

The services sector makes up roughly 80pc of the UK economy and covers the two main areas: business and professional services, such as ­accountancy and marketing; and consumer services, including hotels, bars and restaurants.

Data from the CBI’s latest quarterly survey for the three months to August showed that while both sub-sectors were upbeat about the number of people looking to use their services, they were much more pessimistic about profits because of a large rise in costs.

While business and professional services firms saw volumes grow at the fastest rate since May 2016 and ­expected them to keep rising in the next three months, only 21pc of firms said overall profitability was up on the previous quarter, compared to 25pc who said it was down. This marks the fifth consecutive quarter in which profits in this segment have fallen.