In its latest forecast, the International Monetary Fund said that world economic will slow to 3.7% in 2008 and 2009, 1.25% lower than growth in 2007.

The downturn will be led by the US, which the IMF believes will go into a mild recession this year while growth in the UK will slow to 1.6% in 2008 and 2009.

It expects the US economy to grow by just 0.5% during 2008 and 0.6% in 2009 and to contract in the H1 of 2008. It is predicting growth in the eurozone of 1.4% in 2008 and 1.2% in 2009, with Europe’s largest economy, Germany, growing just 1% in 2009.