2014 growth forecast also cut
The UK economy is expected to grow by just 0.6% in 2013, half the previous forecast for the year of 1.2% growth, according to the Office for Budget Responsibility (OBR).
UK chancellor George Osborne revealed the cut in forecast in his Budget speech in parliament this afternoon.
The fall was attributed to lower than expected momentum in the final quarter of 2012 and smaller contributions to growth from net trade and consumption.
The OBR has also cut its forecast for 2014. It now predicts economic growth of 1.8% in 2014, down from the previous forecast of 2%.
However, the growth forecasts from 2015 onwards remain unchanged from the estimates given in the Autumn Statement 2012.
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