Tariffs and costs will lead to slow growth

US tariffs and higher costs for firms mean the UK economy is set to grow at a slower rate than previously predicted, according to new forecasts.

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Rising costs are set to cause “weak” business investment and weigh on the Government's ambitions to accelerate growth in the UK economy, the Confederation of British Industry (CBI) said.

The influential trade body's latest economic forecast indicated that the UK economy is on track to grow by 1.2% this year. It had previously predicted a rise of 1.6%. It also downgraded its growth forecast for 2026 from 1.5% to 1% for the year.

The CBI highlighted that the UK has seen strong growth over the start of the year, rising by 0.7% in the first three months of 2025.