The UK economy is expected to shrink by 0.6% in 2023 instead of growing by 0.3%, as previously predicted, says the International Monetary Fund (IMF).

The IMF's world economic outlook indicates that Britain is set to be the only major developed nation in recession this year.

While the prospects for every other member of the G7 have either improved or stayed the same since October 2022, the outlook for the UK economy is less optimistic.

However, the update also indicates that the UK economy will recover slightly in 2024, rising by 0.9%.

According to the IMF's chief economist Pierre-Olivier Gourinchas, three main factors are behind the weakened economy.

Firstly, the energy crisis has hit the UK economy particularly hard. Secondly, employment levels in the UK have yet to return to pre-pandemic levels, resulting in less productivity.

Finally, inflation in the UK has been very elevated at 9.1% in 2022 and is expected to remain high at 8.2%.

Commenting on the figures, Chancellor Jeremy Hunt said:

"The governor of the Bank of England recently said that any UK recession this year is likely to be shallower than previously predicted, however, these figures confirm we are not immune to the pressures hitting nearly all advanced economies."

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