Britain unveiled plans on Monday to tap pension funds for the lion's share of an investment of up to 30 billion pounds ($46.5 billion) in big building projects to help to revitalise a stagnant economy forecast to slip back into recession next year.
The measures are the latest in a drip feed of government announcements ahead of Finance Minister George Osborne's autumn statement on Tuesday when growth forecasts will be cut as the euro zone crisis bites.
The OECD forecast on Monday that Britain would suffer a modest recession next year, urging the Bank of England to expand its asset purchase programme designed at shoring up a faltering economy.
Adding to the gloom, British retail sales fell at their fastest pace in 2-1/2 years in November, a survey by business lobby the CBI showed.
Britain's Conservative-led coalition has made it its priority to erase a budget deficit that peaked at 11 percent of national output.
It is cutting spending by around a fifth across most government departments, but the domestic squeeze has coincided with plunging demand from continental European markets hit by the eurozone crisis.
The unemployment level has hit a 15-year high and the government is likely to fail to hit a target of wiping out the structural deficit by 2015, when the next election must be held.
Responding to industry calls to help companies to access cash, Osborne announced measures on Sunday to underwrite 20 billion pounds of loans to smaller companies which are struggling to get credit.