A respected think-tank has drastically slashed its forecast for the UK's economy as it predicted a 0.7% fall this year, having previously expected a rise of 0.5%.
The Organisation for Economic Co-operation and Development (OECD) forecasts that the UK will fail to pull out of its double-dip recession in the current quarter, which will see a 0.7% decline on an annualised rate.
Its 2012 forecast is significantly worse than the 0.5% expansion it predicted last year, when it slashed its forecast from growth of 1.8%. The UK is predicted to be the worst performing G7 nation apart from Italy in the year.
However, it warned that its forecast does not take into account the effects of the Olympics, which many expect to provide a boost to the economy through an increase in tourism and spending on the high street following TeamGB's success.
The OECD predicts the UK economy will not return to growth until the final quarter of the year, when it will expand marginally.
The Paris-based organisation, which works to improve social and economic wellbeing across the world, warned that the worsening eurozone debt crisis is dragging on the entire global economy.