Britain's economy will grow more slowly than previously envisaged this year and next as a result of fiscal tightening but will subsequently pick up speed, finance minister George Osborne said on Tuesday.

Osborne said growth this year would be 1.2 percent -- below the 1.3 percent forecast by the Office for Budget Responsibility last week.

Growth in 2011 is projected at 2.3 percent, below the OBR's forecast of 2.6 percent, before picking up to 2.8 percent in 2012 and 2.9 percent in 2013.

Osborne's forecast for 2013 is higher than that forecast by the OBR, reflecting the government's belief that state cutbacks will unleash the private sector's potential and allow interest rates to be lower for longer.