UK economy expected to shrink this year, says IMF

IMF says euro area and UK - one of only two G7 countries forecast to contract in 2023 - especially hit by energy costs and inflation

• Twin threats of rising rates and deglobalisation leave IMF spooked

The UK economy is expected to shrink this year and will be at the back of the leading G7 countries at a time when a fresh outbreak of financial upheaval threatens the slowing global recovery, the International Monetary Fund has warned.

Emphasising the growing risks of a hard landing for developed countries, the Washington-based body pointed to the UK and the euro area as being particularly affected by rising energy costs and higher inflation.