The IMF says the UK economy is forecast to shrink by 0.6% this year.
The UK economy will shrink and perform worse than other advanced economies as the cost of living continues to hit households, the International Monetary Fund has said.
The IMF said its new forecast reflected the UK's high energy prices and financial conditions, such as high inflation. "As a response to this high inflation there is a tightening of monetary policy by the Bank of England and in the UK this feeds quickly into mortgages, because a lot of mortgages are adjustable rates," he said.Mr Gourinchas also said a factor in the UK's forecast was that employment was still below pre-pandemic levels.
Against the backdrop of growing expectations of a milder recession across the world, the IMF's forecasts for the UK stand out, downgraded by just under a full percentage point since the autumn, and now expected to shrink by 0.6% this year.
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