THE UK economy's future appears bleaker after fresh high-profile warnings were issued.
The Organisation for Economic Co-operation and Development (OECD) cut its UK growth forecasts due to "strong headwinds" from the eurozone.
Meanwhile Charlie Bean, the deputy governor of the Bank of England, said recent figures could imply a "less optimistic outlook" than previously thought.
There has also been a slump in retail sales this month, though these are forecast to rise in June.
Yesterday's warnings come just weeks after the outgoing governor of the Bank of England, Sir Mervyn King, issued a rare vote of confidence in the UK economy.
Sir Mervyn suggested a recovery was in sight and announced the bank had raised its growth forecasts and lowered its inflation outlook for the first time since the 2008 financial crisis.
His comments, weeks after it was confirmed the UK had avoided entering its third recession in five years, were widely seen as a sign the economy was improving.
Last night, Labour seized on the projections, saying they show the Tory-LibDem coalition still has to act to "kickstart the economy".
For its part, the OECD recommended Chancellor George Osborne should increase infrastructure spending.
The chancellor had already announced a rise in capital spending to help the struggling construction sector, as well as the larger economy, but the OECD said those plans should be accelerated.
The organisation also warned the chancellor he risks stoking another housing bubble with his plans to increase property ownership by underwriting mortgages.
Announced by Mr Osborne in the budget, the Coalition's Help to Buy scheme will lend buyers up to 20% of the value of a property, interest free for the first five years. Guarantees will also support another £130 billion of mortgages.
The OECD said the proposals could result in upward pressure on house prices if there is no significant increase in the number of properties being built.
However, there was some good news for the chancellor, as the think-tank cautiously backed the Chancellor's austerity drive, describing planned cuts as "necessary" as it warned "further fiscal consolidation" is required.
But in a blow to the Treasury it cut its UK growth forecasts for this year from 0.9% to 0.8% and for next year from 1.6% to 1.5%. It also said it expects the eurozone to contract by 0.6% this year.
Chris Leslie, Labour's shadow financial secretary to the Treasury, said: "The OECD has once again cut its growth forecasts for the UK economy, warning youth unemployment is too high and that weak growth means wages are not keeping up with price rises. The OECD is just the latest organisation to say the government needs to increase the number of homes being built and that investing in infrastructure now will improve our economy for the future."
OECD secretary-general Angel Gurria added: "The global economy is strengthening gradually, but the upturn remains weak and uneven."
Chris Williamson, chief economist at Markit, a financial information services company, said: "The downgraded global outlook is no surprise. Worldwide business conditions are improving at a much reduced pace compared with earlier in the year. There is a risk of growth stalling altogether."
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