Businesses in the U.K. have endured the toughest quarter in two years as soaring commodity prices and the higher value-added tax weighed on consumer spending, while disposable incomes dropped to 90-year low, according to The Daily Telegraph. On Monday, Ernst & Young reported that 75 companies in the U.K. reported profit warnings in the first quarter of 2011, which is the most since the same period in 2009 when the economy was in recession. The data showed that “squeezed consumer spending and rising commodity price concerns” weighed heavily on the business climate.

Meanwhile, the Center for Business Economics and Business Research reported that rapid price gains and only modest pay increases have brought disposable incomes in the U.K. to their lowest level since 1921. The CEBR has forecast a 2% drop in disposable incomes during 2011, which is more than double the drop seen in 2010. The group’s chief, Douglas Williams, added that the situation will also keep overall economic growth “subdued for the next two or three years.” According to Financial Times, the International Monetary Fund has lowered its previous forecast for 2% U.K. economic growth in 2011 to 1.7%, although growth is still expected to reach 2.3% next year.

Click here to read the story on business from The Daily Telegraph.

Click here for coverage of disposable incomes from The Daily Telegraph.

Click here for coverage of the IMF forecast from Financial Times.