No green shoots just yet

The International Monetary Fund (IMF) has reversed its forecasts for the world economy, predicting a 1.3 per cent fall in 2009, rather than the 0.5 per cent growth it initially predicted in January. The IMF believes the UK economy will fall by 4.1 per cent in 2009, and another 0.4 per cent in 2010, contrary to the chancellor's predictions in the Budget.

As a result, unemployment in the UK is set to rise to 9.2 per cent by the end of next year.But the IMF figures show other countries will be affected even more seriously, with Germany, Japan and Italy all forecasted to see their economies shrink by 5.6, 6.2 and 4.4 per cent respectively.

The IMF calls this downturn "by far the deepest post-World War II recession". It says the UK recession will be "quite severe" because "it is being hit by the end of the boom in real estate and financial services". It does however suggest the world economy will grow in 2010 by an estimated 1.9 per cent.

Gareth