World economy entering ‘perilous phase’ with UK to perform worst in G7 this year, IMF says
The world economy is entering a “perilous phase” of low economic growth and high financial risk, the International Monetary Fund has warned in its latest set of assessments.
The IMF, which is holding its spring meetings in Washington this week, downgraded its outlook for global growth and said its medium term forecast for economic output was now at the weakest level since the fund began publishing these forecasts in 1990.
However its chief economist Pierre-Olivier Gourinchas added that there were also more severe risks in prospect.
He said: “We are… entering a perilous phase during which economic growth remains low by historical standards and financial risks have risen, yet inflation has not yet decisively turned the corner.”
“Below the surface,” he added, “turbulence is building, and the situation is quite fragile, as the recent bout of banking instability reminded us.
“Inflation is much stickier than anticipated even a few months ago. While global inflation has declined, that reflects mostly the sharp reversal in energy and food prices. But core inflation, excluding the volatile energy and food components, has not yet peaked in many countries.”
This cocktail of factors prompted the IMF to cut its forecast for global economic growth by 0.1 percentage points this year and next, to 2.8% and 3% respectively.
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Is Brexit to blame? The war in Ukraine? Ed Conway at the end of January taking a look at the IMF predicting the UK economy would end up behind advanced nations this year
However, the fund said that there was now a one-in-four chance of global growth falling below 2% this year, something tantamount to a global recession, and which has only happened five times since 1970 (most recently in 2009 and 2020).
The UK has received an upgrade to its economic growth forecast this year and next, but it is nonetheless forecast to be the worst performing economy in the G7 this year, shrinking by 0.3%. UK gross domestic product is slated to rise to 1% next year.
The fund’s warnings follow the collapse of Silicon Valley Bank in the US and Credit Suisse in Europe, episodes which have raised the prospect of further financial turbulence in the coming months, as the system responds to rising interest rates.
In the World Economic Outlook, Mr Gourinchas referred to the troubles in the UK pensions market following last September’s mini-budget, saying: “The financial instability last fall in the gilt market in the United Kingdom and the recent banking turbulence in the United States with the collapse of a few regional banks illustrate that significant vulnerabilities exist both among banks and non-bank financial institutions.
“In both cases the authorities took quick and strong action and have been able to contain the spread of the crisis so far. Yet the financial system may well be tested again.”
Yet alongside these immediate concerns, there is another worry haunting policymakers as they gather in Washington for this six-monthly set of meetings: that the global economy may have lost some of its mojo.
The decline in the long term global growth rate in this latest forecast is in part down to “benign” factors – among them the fact that countries like China, which have driven global growth for more than a decade, are becoming higher income nations, with an inherently slower growth rate.
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But the other worry they have is that the world is beginning to deglobalise, with many countries unravelling their supply chains and introducing new trade barriers.
Those barriers, which are rising faster than ever before, could constrict global productivity, implying weaker growth for the long run.
Responding to the IMF statement Chancellor Jeremy Hunt said:
“Thanks to the steps we have taken, the OBR [Office of Budget Responsibility] says the UK will avoid recession, and our IMF growth forecasts have been upgraded by more than any other G7 country.
“The IMF now say we are on the right track for economic growth. By sticking to the plan we will more than halve inflation this year, easing the pressure on everyone.”
Liverpool have won the Premier League title after a 5-1 victory over Tottenham at Anfield.
Arne Slot’s men did it in impressive style, turning over Spurs in a convincing win.
It was a rocky start for the Reds after Dominic Solanke put the north London side ahead.
However, fortunes quickly changed in the first half as Liverpool scored three times without a response.
Captain Virgil van Dijk (centre) celebrates. Pic: Reuters
Salah on his knees in celebration after the final whistle. Pic: AP
Liverpool’s Harvey Elliott (below) and Jarell Quansah celebrate after full-time. Pic: PA
Slot cheers after the full-time whistle. Pic: AP
In the second half, it took until the 63rd minute for Mohamed Salah to make it 4-1 before a fifth followed.
The Reds have won the title in manager Arne Slot’s first season in charge, and move level with fierce rivals Manchester United on 20 league championships.
But it makes them arguably the most successful English club ever as they have won more European Cup or Champions League titles.
Liverpool captain Virgil van Dijk told Sky Sports after the final whistle: “It’s special and it’s something that we don’t take for granted. It’s amazing.
“A lot of emotions before the game, during the whole week, but we got the job done and we (are) truly deserved champions of England. (Liverpool is) the most beautiful club in the world and I think we deserve all of this. Let’s enjoy the next couple of weeks and let it sink in.”
Liverpool’s Kostas Tsimikas poses with a Premier League trophy cut out. Pic: Reuters
Manager Arne Slot and his team after the final whistle. Pic: AP
Slot took over last summer from Jurgen Klopp, who guided them to their previous and maiden Premier League title triumph in 2020, when the COVID-19 lockdown saw matches played behind closed doors.
He is the first Dutch manager to win the Premier League and the fifth man to do so in a debut campaign after Jose Mourinho, Carlo Ancelotti, Manuel Pellegrini, and Antonio Conte.
Speaking to Sky Sports he said: “They [the players] did an outstanding job today. The main job was to win. Everyone said we had got it already. But we had to make sure and we got over the line.”
Several players, including Alisson Becker, Trent Alexander-Arnold, Virgil van Dijk, and Mohamed Salah, played leading roles in both the 2025 and 2020 campaigns.
Van Dijk and Salah recently signed new contracts extending their careers at the club.
Mohamed Salah takes a selfie with fans after scouring the fourth Liverpool goal. Pic: AP
Fans at Anfield during the game. Pic: AP
Fans in the stands at Anfield before full-time. Pic: Reuters
Liverpool will have to wait until the final game of the season – at home to Crystal Palace on 25 May – to be presented with the Premier League trophy.
It will be the first time the club’s fans will have seen their side lift the top-flight title in person since 1990.
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Two pro-Palestinian demonstrators have thrown red powder on Tower Bridge – just moments before leading runners in the London Marathon went past.
The protesters were arrested on suspicion of causing a public nuisance and remain in custody, said the Metropolitan Police.
A video shared by Youth Demand, which is calling for a trade embargo on Israel, shows two people jumping over a barrier that separates spectators from the race course.
The pair, wearing t-shirts that say “Youth Demand: Stop Arming Israel”, are then seen standing in the middle of the road on the bridge.
Pic: LNP
They throw red powder in the air as an official marathon car goes past displaying the race time.
A motorbike with a cameraman on board continues along the route, while a second motorbike stops and one of the riders gets off and pushes the pair out of the way, just before the men’s elite runners pass.
Several police officers then jump over the barrier and detain the pair, the footage shows.
There appeared to be no impact on the marathon.
More than 56,000 participants were expected to take part in the 26.2-mile race through the capital.
Sabastian Sawe of Kenya won the men’s elite race in a time of two hours, two minutes and 27 seconds, while Ethiopia’s Tigst Assefa shattered the women’s-only world record in two hours, 15 minutes and 50 seconds.
Assefa beat the previous best of two hours, 16 minutes and 16 seconds set last year in London by Kenyan Peres Jepchirchir.
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Pic: LNP
The Metropolitan Police said in a statement: “At around 10.38am, two protesters from Youth Demand jumped over barriers at Tower Bridge and threw red paint on to the road.
“Marathon event staff intervened to remove the protesters from the path of the men’s elite race which was able to pass unobstructed.”
The force added that they were “quickly supported by police officers who arrested the protesters on suspicion of causing a public nuisance”.
The Met said the paint “appeared to be chalk-based” and was not expected to “present a hazard to runners yet to pass this point”.
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