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20 September 2011
Last updated at 11:49 ET
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Foreign Secretary William Hague says the UK has the "discipline and determination" to tackle its deficit
The International Monetary Fund has cut its growth forecasts for the UK, in a report warning that the global economy is in a "dangerous new phase".
UK gross domestic product is predicted to grow 1.1% in 2011, down from the 1.5% forecast in the IMF's previous World Economic Outlook report in June.
The growth forecast for 2012 has been slashed from 2.3% to 1.6%.
Foreign Secretary William Hague said the UK had the "discipline and determination" to tackle its deficit.
But shadow chancellor Ed Balls called them "deeply concerning forecasts for both the UK and world economy".
Independent economists are currently forecasting average UK growth of 1.3% in 2011, slower than the IMF, and 2% in 2012, ahead of the IMF figure.
The IMF's UK forecast for 2011 falls behind projections for Germany, France, the US and Canada.
Germany is forecast to grow 2.7% in 2011 while France is expected to show 1.7% growth. The US should advance 1.5% and Canada 2.1%.
However, UK growth in 2012 should surpass both Germany and France, whose forecasts have been cut to 1.3% and 1.4% respectively.
Earlier this month Christine Lagarde, head of the IMF, said the UK's budget deficit stance remained "appropriate" but "the heightened risk" meant a need for a "heightened readiness to respond".
John Hawksworth, chief economist at professional services firm PwC, said: "These new IMF projections certainly support our recent argument for more quantitative easing in the UK sooner rather than later."
However, Chancellor George Osborne has showed no sign that he is considering a 'plan B' for the UK economy.
'Restore health' Mr Hague said that the state of the global economy was a cause for concern so the downgrades to the UK and other countries' growth forecasts was expected.
"The important thing is that we have put ourselves in a position to restore health to our national finances," he said.
Labour's Ed Balls urged action: "Our chancellor and political leaders in Europe need to wake up to the scale of the problem."
In its report on Tuesday, the IMF said: "The global economy is in a dangerous new phase. Global activity has weakened and become more uneven, confidence has fallen sharply recently, and downside risks are growing."
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Please turn on JavaScript. Media requires JavaScript to play.Foreign Secretary William Hague says the UK has the "discipline and determination" to tackle its deficit
The International Monetary Fund has cut its growth forecasts for the UK, in a report warning that the global economy is in a "dangerous new phase".
UK gross domestic product is predicted to grow 1.1% in 2011, down from the 1.5% forecast in the IMF's previous World Economic Outlook report in June.
The growth forecast for 2012 has been slashed from 2.3% to 1.6%.
Foreign Secretary William Hague said the UK had the "discipline and determination" to tackle its deficit.
But shadow chancellor Ed Balls called them "deeply concerning forecasts for both the UK and world economy".
Independent economists are currently forecasting average UK growth of 1.3% in 2011, slower than the IMF, and 2% in 2012, ahead of the IMF figure.
The IMF's UK forecast for 2011 falls behind projections for Germany, France, the US and Canada.
Germany is forecast to grow 2.7% in 2011 while France is expected to show 1.7% growth. The US should advance 1.5% and Canada 2.1%.
However, UK growth in 2012 should surpass both Germany and France, whose forecasts have been cut to 1.3% and 1.4% respectively.
Earlier this month Christine Lagarde, head of the IMF, said the UK's budget deficit stance remained "appropriate" but "the heightened risk" meant a need for a "heightened readiness to respond".
John Hawksworth, chief economist at professional services firm PwC, said: "These new IMF projections certainly support our recent argument for more quantitative easing in the UK sooner rather than later."
However, Chancellor George Osborne has showed no sign that he is considering a 'plan B' for the UK economy.
'Restore health' Mr Hague said that the state of the global economy was a cause for concern so the downgrades to the UK and other countries' growth forecasts was expected.
"The important thing is that we have put ourselves in a position to restore health to our national finances," he said.
Labour's Ed Balls urged action: "Our chancellor and political leaders in Europe need to wake up to the scale of the problem."
In its report on Tuesday, the IMF said: "The global economy is in a dangerous new phase. Global activity has weakened and become more uneven, confidence has fallen sharply recently, and downside risks are growing."
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