Growth in the services sector has fallen to its lowest rate in almost a year, in a further blow to the UK economy.

The sector, which covers everything from banking to teaching and accounts for around 75pc of Britain’s GDP, grew at a slower rate in the month of August, according to the latest purchasing managers index (PMI) from IHS Markit.

Expectations of growth came in at 53.2 in August, lower than the 53.8 recorded in July and below the 53.5 forecast by economists. This makes last month the weakest since September 2016.

Firms blamed “subdued client demand” and rising uncertainty about the UK economic outlook for the lack of strong growth.

New order growth also slowed, with nervous clients holding back on spending decisions amid “fragile business confidence”.

The data also pointed to a sharp increase in costs for service sector companies, with the rate of price inflation at its fastest for six months.

Some firms also suggested that recent exchange rate depreciation against the euro was likely to drive up costs further in the coming months.

Nevertheless, employment growth in the services sector picked up in August to the highest level since January 2016.