MF bosses warned of a “rocky road” ahead for the world economy — with UK output shrinking and risk of global recession rising.
The International Monetary Fund also claimed Britain would be the G7’s worst performer this year.
Chancellor Jeremy Hunt said: ‘The IMF growth forecasts have been upgraded by more than any other G7 country’LNP
But in better news the IMF now predicts our economy will face a softer downturn, shrinking by 0.3 per cent in 2023 rather than its previous prediction of 0.6 per cent.
This still makes the UK the worst-performing major economy in the world and the only economy to shrink this year besides Germany, which has been heavily exposed to Russia’s weaponising of gas.
The UK is then predicted to recover and grow by one per cent next year — at a similar rate to Japan and the US — signalling the country will soon be over the worst of its financial woes. The IMF said: “We are seeing a little bit of a better performance for the UK economy.”
Chancellor Jeremy Hunt said: “The IMF growth forecasts have been upgraded by more than any other G7 country.
“The IMF now says we are on the right track for economic growth.
“By sticking to the plan we will more than halve inflation this year, easing the pressure on everyone.”
The IMF said in its twice-yearly World Economic Outlook that global growth over the next five years will be the weakest since the early 1990s and added that the world economy was now entering a “perilous phase”.
It fears rising interest rates could spark a severe banking crisis that triggers recession.
The IMF added the “global economic recovery endures but the road is getting rocky”.
Pierre-Oliver Gourinchas, the IMF’s chief economist, also took a swipe at companies raising prices and “widening corporate profit margins” which is driving inflation.