Britain's economy is at serious risk of contracting in the current quarter as services firms falter, a business trends report by advisory and accountancy group BDO warned on Monday.
BDO said its output index, which measures turnover expectations over the next three months, fell in October to 92.6, its lowest level since June 2009 when the country was mired in recession.
Despite official GDP figures for Q3 exceeding expectations, the UK's economic recovery remains sluggish and we could already be entering a period of negative growth, said Peter Hemington, a partner at BDO.
The economy grew 0.5 percent in the third quarter but growth in the dominant services sector slowed more than expected in October while the manufacturing sector contracted at its fastest pace in more than two years.
Think tank NIESR said last week the economy faced a 70 percent chance of a recession if leaders of the euro zone, the UK's key export market, failed to resolve the raging debt crisis. Economists polled by Reuters in October, however, gave just a 34 percent chance of a recession.
Firms' hiring intentions remained weak, BDO said, suggesting unemployment could rise above the 17-year high seen in the three months to August.
(Reporting by Jonathan Cable; Editing by Susan Fenton)