The UK economic system is forecast to enhance extra slowly than beforehand predicted after stagnant development late final yr.
The EY ITEM Membership expects UK gross home product (GDP) to develop by 1% in 2025, down from a earlier estimate of 1.5%.
The financial forecaster is the newest influential group to chop its predictions amid continued strain on companies, which face additional tax and wage rises in April.
It represents one other blow to Chancellor Rachel Reeves’ hopes of quickly rising the economic system.
The forecasts additionally level to 0.8% development throughout the economic system final yr, suggesting solely a slight acceleration in financial development.
It comes after a weaker second half of 2024, with a worse-than-expected 0.1% rise in GDP in November and a 0.1% month-to-month decline in October.
The economic system had flatlined over the third quarter of the yr.
However the UK is anticipated to see stronger development subsequent yr, with the forecasts indicating it may see a 1.6% rise in 2026.
Anna Anthony, EY UK regional managing associate, mentioned: “Regardless of the subdued end to 2024, there are indicators that the UK economic system may flip a nook and obtain stronger ranges of development this yr.
She added: “The outlook for UK business is more of a mixed picture.
“Whereas enterprise funding is about to extend, tightening monetary situations and world commerce uncertainty are anticipated to weigh on non-public sector confidence within the first half of this yr.”
