Alistair Darling will next week downgrade his 2008 growth forecasts. Financial Times

In the first confirmation that Britain is heading for an economic slowdown after the credit crunch, the chancellor said there would ‘undoubtedly be an effect’ on Britain.

The chancellor is likely to downgrade his 2.5% to 3% growth forecast for 2008 when he presents the comprehensive spending review and pre-Budget report to the House of Commons, probably next Monday.