The credit crunch is starting to hit IT spending, with 43 per cent of large companies across the world reducing IT budgets this year.

Research from Forrester showed 43 per cent of large firms in the US and Europe were reducing spending on computer hardware and services. But the firm said it was not changing its overall view of IT spending - which it predicts will grow 2.8 per cent this year - although this figure is already down from December predictions of 4.6 per cent. Researchers will continue to review this figure, AP reports.

The survey of 950 IT managers at large firms found 70 per cent were looking to negotiate lower rates with service providers.

More US firms are cutting back than those in Europe, but still just less than half. In the US 49 per cent of large companies are cutting spending, against just 28 per cent in Germany and 33 per cent in the UK. ®