The Office for Budget Responsibility has revised GDP growth down to 0.9% for this year and 0.7% next year, but does not expect Britain to slip back into recession.
George Osborne revealed the prediction, made by the independent economic forecaster, as he began delivering his Autumn Statement in the Commons on Tuesday afternoon.
The chancellor also confirmed to MPs that he will not able to get rid of the structural deficit by 2015 as he had originally pledged.
Osborne announced his plans for boosting the UK economy against a background of financial turmoil in the eurozone and gloomy forecasts for Britain.
On Monday the the Organisation for Economic Co-operation and Development (OECD) warned that the UK was at risk of a double-dip recession.
Check our liveblog below for all the developments, analysis and to find out who will pay for the boost to growth: