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According to Charles Davis, senior economist at the Centre for Economics and Business Research (CEBR), business survey data suggests that investment intentions are dropping to low levels.
"When you think through the effects of the credit crunch on firms' access to capital and the current fairly dire economic prospects, investment is going to be a real area that suffers," he commented.
Mr Davis added that business investment would be one of the factor's considered by the Bank of England when it next sets interest rates.
Last month, figures from the Office for National Statistics showed that business investment fell by almost four per cent in the last quarter of 2009 and by 7.7 per cent compared to the same period in 2007.
The CEBR was established in 1992 as an independent consultancy to provide sound business advice based on thorough research.
