UK economy forecast to slow for two years as confidence hits new low

The UK economy will slow sharply for two years as Donald Trump's global tariff war affects consumer spending and business investment, a study by a leading forecaster predicts.

- Mark Sweney

The findings by EY Item Club, which is sponsored by the "big four" accountancy firm EY, came after a separate survey reported that confidence in Britain's economy had fallen to the lowest level on record.

The poll by Ipsos Mori, which has been tracking net economic optimism in Britain since 1978, found three-quarters of Britons expected the economy to worsen over the next year. Just 7% thought it would improve, and 13% said it would stay the same, meaning a net score of -68.

EY's forecast said it now expected UK GDP to grow by 0.8% this year, down from 1% in February, and has cut its 2026 forecast from 1.6% to 0.9%.