The British economy faces escalating challenges as forecasts for growth in 2025 and 2026 have been sharply cut due to political uncertainty and economic disruptions. The EY Item Club downgraded growth estimates to 0.8% for 2025 and 0.9% for 2026, influenced significantly by US tariffs and a cautious domestic spending environment. Confidence in the UK economy is at an all-time low, and businesses are hesitant to invest. Although there are signs of optimism in specific sectors, the overall outlook remains uncertain with potential disruptions ahead.
"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."
"The services-led UK economy is projected to see continued growth this year and gradual interest rate cuts should slowly bolster business and household spending."
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