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Stagecoach is cutting jobs as it admitted the travel sector would not be immune from the downturn.

Stagecoach said its rail business will suffer as unemployment hits central London and fewer commuters travel to the capital.

The group said it is reducing costs ahead of an expected fall in revenue, which will involve headcount reductions.

Chief executive, Brian Souter, said: "The short to medium term outlook for our UK rail operations is challenging and in anticipation of a further deterioration in economic conditions, we are taking action now to ensure our rail businesses remain competitive."

Stagecoach has declined to speculate on the number of job cuts although said they would likely be in sales support and administration.

Stagecoach said it would introduce other revenue protection measures such as automatic ticket gates and smart cards.

However, the group said it expects its bus operations to fare better throughout the downturn.

Mr Souter said: "We expect our bus businesses to continue to perform well through difficult economic conditions."

Like-for-like UK bus passenger volumes were up 4.1 per cent over the first half, the company said, as more people switch from car to bus.