The economy is expected to contract by 0.2% in the year to March 2018, according to a new forecast by the Office for National Statistics (ONS) on Monday.
The outlook for inflation, which has been rising since the Brexit vote, is forecast to fall to 2.4% in 2019 from 2.6% in 2018.
The ONS said that it expected to record 0.3% growth in real gross domestic product (GDP) for the first time in the next five years.
However, this is lower than the forecasts for a 2.7% increase in the previous year.
The agency forecast a 2% contraction in inflation, but this is higher than the 3.1% contraction that the Bank of England forecast in July 2018.
“It is the weakest forecast yet and is well below expectations,” said David Cuthbert, an economist at Berenberg.
“We expect the economy to contract a bit more than forecast, and inflation to rise slightly in 2019.”
The ONSA forecast that growth will fall to 0.7%, slightly above the 0.6%.
However, the agency’s forecasts are slightly weaker than those of economists at HSBC, which had said in January that growth would fall to 1.3%.
The ONSP said that this would be followed by a “gradual rise in inflation” of 0.8% in 2020 and a further 1.2%.
This would be offset by a 0.4 percentage point fall in real GDP in 2021.
The central bank’s chief economist, David Ritchie, told a conference on Monday that the inflation rate would remain steady, which he said meant that inflation could be kept below 2%.
However the central bank also raised its benchmark rate for lending to businesses to a record 1.5%, with a view to stabilising inflation.
He said that there would be “no surprises” in the UK economy.
This is in contrast to the UK, which is currently on a “fiscal cliff” where its debt rises in line with GDP growth.
The government is also set to introduce an increase in personal income tax for the second time this year, in the autumn.
However Mr Ritchie said that while the measures were “a long way from having a noticeable impact” on the economy, they were “not likely to have much effect on the inflation outlook”.
He said the ONS’s forecasts showed that the UK was on the right track to achieve full employment and an inflation rate of 1%.
“It does look like we have the right balance to achieve that goal, with a modest decline in inflation,” he said.