The British Chambers of Commerce (BCC) has cut its forecast for growth this year and next, forecasting gross domestic product (GDP) to edge up by 0.6% in 2013 and 1.7% in 2014.
It believes the UK will avoid a triple dip recession, with the economy recovering from its 0.3% contraction in the fourth quarter to grow in the first quarter - albeit by a paltry 0.1%.
David Kern, BCC chief economist, said:
We expect quarterly growth to increase very gradually over the next two years, but it will remain modest and below-trend for some time.
In addition, we now expect GDP to return to its pre-recession levels early in 2015 and the squeeze on living standards will continue for a while longer.
More top news
The family of a wealthy British man has claimed he was murdered by his Ukrainian bride in Kiev so she could inherit his fortune.
Medics and flight crew had been rescuing an injured skier when they crashed in the region of Abruzzo.
A story of two halves