Tax rises and drop in investment predicted to limit UK growth

EY Item Club downgrades forecast for next year, with Office for Budget Responsibility expected to follow suit

The prospect of looming tax rises and a fall in business investment will restrict the UK's economic growth rate next year to less than 1%, according to a health check of the economy by a leading consultancy.

With less than four weeks before Rachel Reeves delivers her budget on 26 November, the EY Item Club has downgraded Britain's growth for next year, indicating that the economy will continue to expand at a sluggish pace, limiting tax receipts and the chancellor's financial room for manoeuvre.