The economy stalled in the six months to March and data this morning are expected to show sluggish growth of just 0.2pc for the quarter to June, half the level predicted by the Office for Budget Responsibility (OBR). Zero growth in the three months to June or a slow third quarter could cost the UK its gold-plated rating, economists now fear.
"I don't think there are immediate ramifications unless we get a negative or flat outturn. Without a strong bounce back in the third quarter, though, there is quite possibly a risk for the sovereign rating," Ross Walker, UK economist at Royal Bank of Scotland, who expects growth of 0.3pc, said.
Stephen Lewis, chief economist at Monument Securities, added: "If the third quarter is poor as well, I fear we will be put on negative watch."
A cut to Britain's top-notch rating would be highly damaging, costing the country its safe-haven status, increasing the price of debt for the Government, and potentially slowing the recovery further. Although ratings agencies declined to comment on Monday, they have raised concerns about growth.
Moody's said in March: "We believe that slower growth combined with weaker-than-expected fiscal consolidation could cause the UK's debt metrics to deteriorate to a point that would be inconsistent with a triple-A rating."
Growth has slowed sharply since then. At that point, the OBR had expected expansion by 0.6pc over the nine months to June. It is now forecast to have managed just 0.2pc.
Similarly, Standard & Poor's reaffirmed the UK's rating in December on the assumption that growth this year would be 2pc. The consensus is currently just 1.5pc.
Despite growth fears, economists urged the Government to stick to its deficit reduction plans and reject Labour's call for a temporary cut to VAT. "What would be more damaging would be if we were to see slippage on spending cuts," Mr Walker said. "Gilts have a safe haven status. It would be madness to put that at risk through policy dilutions."
Danny Gabay at Fathom Consulting added: "The biggest risk to our rating is if the Government caves in. It has set out a plan for short-term pain that leads to long-term growth. That has got to be right."
On Monday, Prime Minister David Cameron indicated the Government would not alter its £110bn programme, saying: "There's no country, really, that can afford another fiscal stimulus. They've all run out of money."
The spread of forecasts for Tuesday's figure is unusually wide, from a contraction of 0.3pc to growth of 0.5pc. A number of factors may have distorted the data, including the extra bank holiday for the royal wedding, the supply disruption caused by the Japanese earthquake, and maintenance work in the North Sea.
Simon Ward, Henderson's chief economist, said underlying growth in the quarter was "in reality stronger than whatever figures are published". However, Ed Balls, the shadow Chancellor, will reiterate that anything less than 0.8pc indicates the OBR will have to downgrade its forecasts for a fourth time in the autumn.
