The Office for Budget Responsibility (OBR) predicts gross domestic product (GDP) growth for the UK will be 0.9% in 2011 and 0.7% in 2012.
These figures are down from predictions of 1.7% and 2.5% respectively, made in March.
Chancellor of the Exchequer, George Osborne, announcing the figures in his Autumn statement, said borrowing would be £5bn more this year than originally forecast.
It is predicted to be £19bn higher next year and £30bn higher in 2013-14, but the Chancellor also said that lower market interest rates meant the UK's debt interest payments would be £22bn less than predicted this parliament.
Debt to GDP ratio will reach 78% in 2014/15 then start falling, the OBR said.
This is a rise of 8% on its previous forecast but still lower than the OECD's predictions.
However, George Osborne said the government will still meet budget rules, albeit later than before.
The Chancellor highlighted a warning from the OBR that "the euro area finds a way through the current crisis and that policymakers eventually find a solution that delivers sovereign debt sustainability".
"If they do not then the OBR warn that there could be a much worse outcome for Britain," Osborne added.
"We hope this can be averted, but if the rest of Europe heads into recession it may prove hard to avoid one here in the UK."
Shadow Chancellor Ed Balls highlighted that the economy was flat and would not grow as predicted: he claimed the government's Plan A had failed 'colossally'.
He said there was "a crisis in growth and jobs" in Britain because the Government had cut "too far and too fast".
Ahead of a large public sector strike tomorrow the OBR added fuel to the fire, saying 700,000 public sector jobs would go by 2017 - up from 400,000 by 2016 previously.
The Chancellor upped the stakes further by announcing public sector workers would get a 1% pay rise when the pay freeze ends, rather than 2% previously.
The OBR's report said there would be no significant real term increase in wages and salaries, be they public or private sector, until 2014.
- Public sector pay awards will be cut to 1% after current freeze ends rather than 2% previously forecast.
- The state pension will rise by £5.35
- Working age benefits will be uprated by 5.2% - the Consumer Price Index inflation number - in September
- The launch of a £40bn National Loan Guarantee Scheme for businesses with less than £50m turnover. It will be up and running in the next few months with the first £20bn on offer
- £1bn Business Finance Partnership launched for mid-sized companies
- £400m fund for construction firms that have planning permission but can't get finance
- This will include a new rail link between Oxford, Bedford and Milton Keynes to create 12,000 jobs
- UK government will not agree with a financial transaction tax
- Bank levy raised to 0.088% from Jan 2012, aiming to raise £2.5bn a year
- 500 infrastructure products identified to be brought forward using £5bn of additional public spending paid for by savings elsewhere - 'a huge commitment to overhauling the physical infrastructure of the national'
- Government to 'cut' Southern Water customers bills by £50 each
- Superfast broadband to be developed
- Will go ahead with Enterprise Zones with two new ones announced in Lancashire and Humberside
- There will be a new 'above the line R&D tax credit'
- Employment law changes: we will call for evidence on changing TUPE rules, as well as cut H&S rules for small firms
- Business rates holiday extended from October 2012 until April 2013
- 200,000 young people to be helped into work through work experience with private sector companies and training
- Education reform: 1.2bn to be given for education infrastructure ... 1/2 to local authorities others will go to fund 100 additional free schools including maths schools for 16 - 18 year old to produce engineering and science graduates
- Government to fund reduction in rise in train fares. Was going to be RPI [Retail Prices Index inflation] + 3%, now will be RPI + 1%
- 3p fuel duty rise for January to be cancelled and 5p rise in August will be cut to 3p