The Bank of England has cut its UK growth forecast for 2011 from 1.8% to about 1.5%, warning that the "headwinds are growing stronger by the day".
The central bank's governor, Mervyn King, said Europe's debt crisis and fears of contraction in the US are overshadowing the world economy.
Mr King told a press conference that the UK economy had weakened since May, adding that inflation was still on course to hit 5% this year, the BBC reports.
But he repeated that the Bank still expects inflation to fall next year.
Mr King said that some of the biggest risks to economic growth come from the euro zone, where some countries are trying to shore up their fiscal and banking systems.
