Britain's economy looks set to slow further after a collapse in confidence among business, according to a new report.

The economy is on course to grow by just 0.3 per cent in the second quarter of the year following expansion of 0.4 per cent in the first quarter and 0.6 per cent in the final quarter of 2015.

The figures come from the Institute of Chartered Accountants in England and Wales (ICAEW).

UK economy: Businesses are less optimistic about next year, a survey has revealed

Its barometer of optimism among British firms fell to 0.8 – down from 11.4 three months ago and 37.3 in the middle of 2014, and is now at its lowest level since early 2012. It measures whether firms are more or less confident about the next year.

Some economists last week branded doom-laden warnings from the Government and others over Brexit ‘economic nonsense’.

But ICAEW chief Michael Izza said: ‘A combination of factors has led to this negativity and includes the EU referendum, slowing domestic sales, Chinese growth slackening and the recent Budget.

‘Businesses cannot plan with confidence.

‘Weakening growth will also mean lower tax receipts for the Chancellor, making it even harder for him to meet his deficit goal.