The latest IHS Markit Business Activity Index for services came in at 39.7 from 39.4 the month before, well below the 50 mark that separates growth from contraction as coronavirus lockdowns continued to weigh heavily on the sector.

The median forecast in a Reuters' survey of 10 analysts had pointed to a reading of 45.3.

The sub-index for new business in the sector climbed to 41.7 from a previous 37.7 -- a number which still signalled a rapid drop in activity.

The service sector index collapsed to a record low of 10.8 in April, reflecting the severe impact of the coronavirus lockdown. It rose over the following four months before slipping again between August and October as new restrictions were imposed to slow a fresh wave of infections.

By contrast, IHS Markit's sister survey for manufacturing, released on Monday, showed activity expanding for a sixth straight month in December though at a slightly slower rate than expected.

The composite Purchasing Managers' Index (PMI) for services and manufacturing edged up to 43.0 in December from 42.7 in November.

(Reporting by Crispian Balmer; Editing by Catherine Evans)