Ernst & Young cuts UK growth estimate on eurozone fears

Worries over the eurozone debt crisis have prompted the Ernst & Young Item Club to cut its forecast for GDP growth this year from 1.8% to 1.4%.

Peter Spencer, chief economic adviser to the much-watched Item Club, said the eurozone crisis had left the UK economy "at a critical juncture", with investors and businesses "lacking the confidence" to invest. It predicts growth will remain sub-par next year at 2.2% - it had previously estimated 2.3% growth - but accelerate to 2.5% in 2013 and 2.7% a year later. The lower forecast comes ahead of the publication this week of minutes from the Bank of England's latest Monetary Policy Committee meeting, and suggests interest rates will remain at historic lows for some time to come. "Th...