The service sector in the UK has slowed moderately in the month of September and services providers cut jobs for the first time in ten months amid a volatile global economic environment.

The services Purchasing Managers' Index (PMI) of the country fell to 52.2 from 53.7 in August. The situation was worse for manufacturing and construction PMI's indicating contraction. The combination of the three PMIs was 51.1 for the month of September compared to 52.2 in the earlier month.

Many believe that the Bank of England will expand its programme to purchases assets once tis current pledge of 50 billion pound is exhausted in November. However, the bank is unlikely to announce any further measure during its upcoming meeting on Thursday.

Survey compiler Markit said that services firms were able to record rise in new business in September following a slowdown due to Olympics in August. The company also pointed out that most firms remain optimistic that the situation will improve further in the coming months. The expectations index rose from 66.5 in August to 67.0 during the month.

However, the increasing costs and continuing uncertainty in the economic outlook as well as inability to increase prices has put a lot of pressure on profit margins of the companies.