The International Monetary Fund (IMF) has issued a surprise downgrade to its UK economic forecasts, little over a fortnight since its last projections.
The world’s lender of last resort used its annual review of the UK economy to judge that gross domestic product (GDP) would plunge by 10.4% this year.
Earlier this month, its latest World Economic Outlook put the figure at 9.8%.
The Fund blamed “second wave headwinds” from the coronavirus crisis for the adjustment, while also trimming its outlook for the fightback in growth during 2021 from 5.9% to 5.7%.
Its report warned that risks to its forecasts were skewed to the downside with persistent unemployment and lower productivity growth set to hold GDP 3%-6% below its pre-pandemic trend for the medium term.
It said risks would include the lack of a trade deal with the EU when the Brexit transition period ends.