IMF: UK economy to shrink 0.4% this year

The International Monetary Fund (IMF) has cut its forecast for the UK economy, now warning it faces a hefty contraction this year, as part of a downgrade of most nations globally.

In its latest forecast, the IMF said the UK economy would shrink by 0.4% this year, much worse than an estimate in July which predicted growth of 0.2%. The IMF also downgraded its 2013 forecast to 1.1% growth, compared to 1.4% previously. The IMF's Fiscal Monitor report, published today, added Britain should relax its fiscal consolidation strategy - which aims to cancel the country's structural deficit by 2017 - if the economy remained weak. The report could pile pressure on George Osborne to switch to plan B to boost the UK's ailing economy, which has contracted over each of the p...