The impact of government spending cuts, jittery world markets and the prospect of an EU referendum vote have dragged down expectations of UK services growth this year.

The sector, which accounts for more than three-quarters of economic activity and ranges from shops and hotels to banking, maintained its solid growth in the run-up to Christmas, but a survey found that expectations for business activity over the next 12 months was the weakest for almost three years.

The Markit/Cicps UK services business activity index, a single-figure measure tracking the health of service companies, fell slightly in December to 55.5, from 55.9 in November, but remained just above the long-run survey trend level of 55.2, with a reading above 50 indicating expansion.

Companies said they continued to hire staff and pay them more to cope with high levels of business in 2015, though the rate of job creation slowed to the weakest since July.

Chris Williamson, chief economist at Markit, said the sector had put in a solid performance and provided enough impetus to make it likely that GDP growth was 0.5% in the last quarter of the year, slightly above the 0.4% registered for the third quarter.

“The services sector remained the key driver of the UK’s economic upturn in December, helping to offset the recent weakness seen in manufacturing and putting the economy on the starting block for another year of 2-2.5% growth in 2016.”

But he warned that “a rosy outlook” was not guaranteed. “With business expectations about future workloads dropping to the lowest for almost three years, firms are becoming more cautious in the face of growing uncertainties. The cost impact of the living wage, government spending cuts, a potential hike in interest rates, global economic growth jitters and, of course, Brexit are all weighing on business minds and pose significant downside risks to economic growth in 2016,” he said.

“The pace of hiring has already slowed accordingly as firms scale back expansion plans in what might be seen as a warning shot to those taking a complacent view of economic prospects for the coming year.”

Vicky Redwood, chief UK economist at the consultancy Capital Economics, agreed that significant headwinds would restrict GDP growth this year. “The recovery seems unlikely to pick up significant pace this year as it is battling the renewed fiscal squeeze and uncertainty ahead of the EU referendum,” she said.