Growth in the UK's economy is set to be slower than previously predicted as a result of the trade disruption and uncertainty caused by US trade tariffs, an economic forecaster has said.
The EY Item Club has downgraded its UK growth forecast for this year to 0.8% from 1.0%, and cut it to 0.9% from 1.6% for 2026.
The recently imposed tariffs on the UK and other countries are expected to dampen business and consumer confidence as well as reduce demand for goods and services.
The tariffs include a 10% baseline tax on imports from the UK as well as a 25% tax on all aluminium, steel and cars.
Business investment is predicted to be weaker as many firms become more cautious amid "high levels of uncertainty" in global trade.
"Businesses thrive on certainty, so it's unsurprising that an unpredictable global market is translating into lower levels of business investment over the short term," said Anna Anthony, EY UK & Ireland regional managing partner.
Last week, the International Monetary Fund (IMF) cut its growth forecasts for many major economies, including the UK.
It now expects the UK to grow by 1.1% this year, down from its previous prediction of 1.6%.
