UK economic growth predicted to slow as construction industry struggles

But NIESR thinktank says recovery is stable despite weak productivity and troubled eurozone

Britain's economy will grow at a slower pace this year and faces serious risks from weak productivity and a troubled eurozone, a leading thinktank has warned.

The National Institute of Economic and Social Research (NIESR) has cut its forecast for growth this year to 2.5%, down from 2.9% pencilled in three months ago and below the 2.8% rate last year. The move follows much weaker than expected official GDP figures for the first quarter, which saw Britain's growth rate halve to 0.3%.