Firm evidence of a slowdown in Britain's service sector has been revealed by the latest British Chambers of Commerce economic survey, which also showed the woes of the long-suffering manufacturing sector intensifying.

The chambers' quarterly economic survey, described by one analyst as the best news in months for mortgage payers, called on the Bank of England to cut interest rates in November to rebuild confidence. The group said the service sector - an area keenly watched by the Bank of England - was reporting "rapid deterioration" in domestic growth, showing net losses in overseas markets for the first time in five years and expecting things to get worse.