THE UK’s services sector is desperate for more skilled workers, despite job creation rising to a seven-year high, a report has said.

The Confederation of British Industry (CBI) says more businesses revealed increased staff numbers for the three months to May, which was the best performance since November 2007.

According to the survey, which covered 174 firms, workloads across accountancy and legal companies lifted to a near ten-year high, resulting in profits rising at their quickest pace since late-2007.

Growth across consumer services, such as hotels and restaurants, was more moderate, with stronger prices supporting margins.

However, despite the optimism, the CBI has warned company bosses are still facing skills shortages.

It said an above average number of firms were holding back on spending due to a lack of workers, with lower skills affecting expansion plans across accountants, legal practices and marketing companies.

Rain Newton-Smith, the CBI’s director for economics, said: “Prospects for consumer services remain buoyant, as real incomes rise supported by low inflation and strong employment, fuelling spending in bars, hotels and restaurants.

“However, concerns about skills shortages are increasing in both sectors, particularly among business and professional services firms looking to expand.”

But, reacting to the wider results, Ms Newton-Smith said they give real reason to believe a drop in growth across the early part of the year was a blip.

She added: “Strong confidence and activity in the services sector reinforces our view that weaker growth over the first quarter of 2015 will prove temporary.

“Capital spending plans are firm across the sectors, especially in consumer services, where companies are focussing on developing market share by reaching new customers and providing more services.”

The survey comes after official figures confirmed UK gross domestic product increased by 0.3 per cent in the first three months of 2015, half of its rate in the fourth quarter of last year, and the worst performance since the end of 2012, scotching hopes for an upward revision.

The figures from the Office for National Statistics showed the services sector, representing more than three-quarters of UK output, had a more sluggish three months than first estimated.