The Confederation of British Industry has cut its growth forecasts for the UK economy, warning that uncertainty ahead of the EU referendum is beginning to weigh on investment.
The business group's latest quarterly forecast predicts that the UK will see 2% GDP growth in both 2016 and 2017, down from its previous estimate of 2.3% and 2.1% respectively.
The CBI said growth is expected to be driven by household spending and investment, but the deterioration in the Brexit vote and the global economic outlook represent "major challenges".
It said that Brexit uncertainty is now having a "tangible impact" on the spending plans of some firms.
The warning comes after Bank of England governor Mark Carney revealed a Brexit vote could trigger a possible "technical recession" and see the pound plunge in value.
The Bank of England also last week slashed its growth outlook for the next three years.
"A dark cloud of uncertainty is looming over global growth, particularly around weakening emerging markets and the outcome of the EU referendum, which is chilling some firms' plans to invest," CBI director general Carolyn Fairbairn said.
"At present, the economic signals are mixed - we are in an unusually uncertain period," she added.
The CBI believes that the timing of a first rise in UK interest rates - which have been held at 0.5% since 2009 - will now be in the second quarter of 2017, rising to 0.75%.
The CBI said that referendum uncertainty also appears to be dampening some activity in the near-term, and so put altogether, it does not now expect to see a rise in interest rates before 2017.
