BRITAIN has a 17 per cent chance of plunging back into recession, the International Monetary Fund warned today. In a brutal assessment of the stalling global recovery, the IMF said Europe and the US could also see a double dip.
It slashed growth forecasts for the UK from 1.7 per cent to 1.1 per cent for this year — bringing it in line with other organisations.
For 2012, the IMF said the UK economy would grow by 1.7 per cent, compared to earlier predictions of 2.3 per cent. But in its latest World Economic Outlook, the IMF said there was a stunning 38 PER CENT chance of another recession in the States — the world's largest economy.
And it urged both the US and Europe to get on with cutting their debts. It said: "Policy indecision has exacerbated uncertainty and added to financial strains, feeding back into the real economy."
The gloom came just hours after Italy's credit rating was downgraded by STANDARD & POOR'S. And EU and IMF leaders remain locked in talks over Greece's mammoth debts.
Credit rating agency FITCH today said that it expected Greece to default on its debts but remain in the Eurozone. But it blasted: "The failure to deal decisively with Greece continues to erode confidence in the capacity of European institutions and policymakers to manage the broader crisis."
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