Forecasters have warned that the UK could suffer a $22billion blow to its economy as Donald Trump's tariffs continue to threaten global trade.
New analysis from KPMG predicts that the US president's trade war will slow growth to just 0.8% over the next two years.
It previously thought that the economy would expand by 1.7% this year and 1.4% next year, compared with 1.1% in 2024.
However, the reduction will leave Britain £21.6billion worse off by 2027, and the 10% tariffs on the UK has threatened Rachel Reeves's attempts to kickstart the economy.
Yael Selfin, KPMG’s chief UK economist, warned that Britain’s economy will suffer from the fallout of the global trade war, particularly as other nations respond with retaliatory tariffs.
She said the trade war will have “huge implications for the Chancellor”.
“There are so many things that could get worse,” said Ms Selfin. “Ultimately, the main worry is confidence. Trade disruption is bad, but uncertainty is the big unknown.”
Investors continue to brace for further turbulence in financial markets in response to fears that Trump’s tariffs could cause recessions around the world.
Trillions of dollars were wiped off of the value of global stocks last week and the FTSE 100 index in London posted its biggest daily drop since the start of the CV19 on Friday.