Earlier today, the IMF (International Monetary Fund) significantly lowered its UK growth forecast for 2012 to 0.2%. In addition, it warned the risks from the eurozone debt crisis are a constant threat.
The IMF also lowered its expectations for the UK’s growth next year from 2% to 1.4%.
Meanwhile, growth in emerging markets, such as China and India, has slowed and the IMF admitted that previous forecasts may have been too optimistic.
It now predicts emerging market growth of 5.6% this year, a value that is slightly lower than its previous estimate.
The global economy will grow by 3.5% in 2012 and 3.9% in 2013, again, lower than its forecast three months ago.
On an even gloomier note, the IMF has slashed its growth forecast for the UK by more than for any other developing country.
A Treasury spokesman said the eurozone crisis was impacting on the UK economy but said the new “funding for lending” scheme would encourage banks to lend to small businesses.