The CBI reported yesterday that hotels, bars, restaurants and cinemas have had their toughest quarter since 2001. A survey by the employers' organisation, which covered the three months to April, revealed that consumers are already cutting discretionary spending. Even more worryingly, the drop in consumer spending comes despite the fact that employment levels remain high. Ian McCafferty, chief economic adviser of the CBI said: “Services sector firms are concerned about their business prospects. “Consumers are reining in spending on leisure, entertainment and eating out, while professional services such as accountancy, property and law have seen their profits flatten off as costs continue to grow strongly.” The CBI also discovered that profitability among hotels, bars and restaurants fell at its fastest rate since the survey began in 1998. The organisation said 60% of consumer sector firms had reported a fall rather than a rise. It also said that forecasts of overall profitability were falling, with 39% more businesses expecting lower profits in the next three months. The survey also revealed that 43% of companies expect costs to rise in the next three months.