The Office for National Statistics said the UK has recovered only half of the fall in GDP seen since the start of the 2008 recession, with output still 3.3% lower than its pre-recession level.
Business leaders at the World Economic Forum cautioned against complacency amid optimism that the eurozone is emerging from its crisis.
The Chancellor blames GDP figures on the crisis he inherited, and troubles abroad. As criticism mounts, his position becomes more difficult.
Unusually frank words for the government from one of the City's top economists on today's dismal GDP figures.