Eurozone crisis to hit UK's growth

The sovereign debt crisis in the eurozone will drag UK economic growth down to just 1.4 per cent this year.

The Ernst & Young Item Club said the crisis and global concerns were raising uncertainty among the business and investment community, as it slashed its growth forecast for 2011 down from the 1.8 per cent made in April.

Peter Spencer, the chief economic advisor to Item, said: "The UK economy has hit a critical juncture. The risks to the world economy and the eurozone are plain to see, starting with the Greek default, which hangs like the sword of Damocles over Europe."