The National Institute of Economic and Social Research (NIESR) forecast the economy would contract very slightly this year but grow next year.
In its previous forecast in August, the think-tank had forecast the economy would grow by 1.3 per cent in 2013 but this month it downgraded this forecast slightly to 1.1 per cent.
Economic growth would not rise above two per cent until 2015, it said.

A spokesperson for NIESR said: "The outlook for the international economy had weakened. This had led us to revise our forecast for UK growth next year down slightly.
"We now expect the economy to expand by 1.1 per cent per annum, with no contribution from net trade and somewhat faster the following year. Only in 2015 do we expect economic growth to rise above the UK's potential rate of two per cent per annum."
Consumer prices inflation is forecast to be 2.7 per cent this year and two per cent in 2013.
It said GDP had been distorted this year due to one-off events and had been broadly flat for the past two years. It said it did not expect to see any GDP growth this year. NIESR warned the economy was still around 3.3 per cent below its pre-recession size in terms of output seen in January 2008.