Britain's struggling economy is on course to shrink this year as the eurozone's debt crisis bites, according to the OECD think-tank.
The warning – the first from a major international organisation – comes in the wake of the UK's surprise 0.7 per cent contraction between April and June.
Just two months ago, the OECD was forecasting 0.5 per cent growth this year, although the IMF slashed forecasts to just 0.2 per cent this month.
The OECD's economist in charge of UK forecasts said: "Most of it is really about the external environment – the eurozone crisis is going to weigh on the UK in the coming months. Under these circumstances you cannot expect much more than very slow growth. GDP will probably fall in 2012."
But figures from employment consultant Reed added to doubts over the official growth figures after an apparently buoyant July for the jobs market. The number of new job opportunities grew 2.5 per cent over the month and 13 per cent year on year, Reed said. Its index found regions such as the North-east and West Midlands are faring particularly well with opportunities up more than 6 per cent and 5 per cent respectively.