There have been more gloomy predictions about the state of the UK economy. The burden of UK government debt will remain above pre-crisis levels for 20 years, says the independent Institute for Fiscal Studies (IFS), a think tank. In its annual Green Budget, the IFS says that the government will need to raise taxes or cut spending by an extra £20bn to repair the public finances. Meanwhile, the International Monetary Fund predicts that the UK will see its economy shrink by 2.8% in 2009. It also expects the UK economy to grow by just 0.2% in 2010.World economic growth is set to fall to just 0.5% this year, its lowest rate since World War II, warns the International Monetary Fund (IMF). In October, the IMF had predicted world output would increase by 2.2% in 2009. It now projects the UK, which recently entered recession, will see its economy shrink by 2.8% next year, the worst contraction among advanced nations. The IMF says financial markets remain under stress and the global economy has taken a "sharp turn for the worse".
Watch the IMF press conference highlighting the key aspects of the report.
