A think tank has warned that 2013 could turn out to be a "groundhog year" with a repeat of sluggish growth and crisis in Europe seen in 2012.
The Institute for Public Policy Research (IPPR) said that consumer and business spirits have been so thoroughly dampened by talk of years of austerity ahead that the economy mail fail to grown again this year.
In a gloomy New Year message, IPPR chief economist Tony Dolphin said the Government "still does not have a path back to growth" and appeared to be pinning hopes on "something just turning up".
The Office for Budget Responsibility 's forecast of 1.2% GDP growth in 2013 and 2% in 2014 depend on a "very unlikely" readiness for hard-pressed households to drop the habits of the last four years and take on additional debt, he added.
The IPPR is calling on the Government to boost demand in the economy, pump more investment into infrastructure, establish a British Investment Bank and guarantee a minimum wage job in charity or local government for anyone unemployed for more than a year.
Mr Dolphin said: "Policy-makers appear to have little idea how to boost growth in the economy and are left hoping that the news will get better.
"The risk is that 2013 could be groundhog year for the UK economy.
"The latest forecasts suggest growth in 2013 will be weak, but better than in 2012, and that unemployment will rise.
"The risk is that they are too optimistic about growth, but that - unlike in 2012 - they are right about unemployment."
He added: "How this plays out politically will depend to some extent on what happens to unemployment.
"In 2012, the double-dip recession did less damage to the credibility of Government economic policy than it might have done because employment increased and unemployment fell by more than expected.
"The best way to describe the outlook for the UK economy is 'uncertain'."