The UK and US economies will expand more slowly in 2017 than previously predicted, according to the International Monetary Fund (IMF).
It said “weaker-than-expected activity” in the first three months of the year meant the UK would grow by 1.7%, compared with an earlier 2% forecast.
The International Monetary Fund has cut its growth forecast for the UK economy this year after a weak performance in the first three months of 2017.
In its first downgrade for the UK since the EU referendum in June last year, the IMF said it expected the British economy to expand by 1.7% this year, 0.3 points lower than when it last made predictions in April.
However, its overall global economic predictions – of 3.5% growth in 2017 and 3.6% in 2018 – remain unchanged.
Meanwhile the outlook for several eurozone economies is brighter than initially thought, with countries including France, Germany, Italy and Spain seeing growth forecasts revised up.
Maurice Obstfeld, the IMF’s economic counsellor, pointed to a marked change in early 2017. He said the UK’s growth forecast had been lowered based on its “tepid performance” so far this year, adding: “The ultimate impact of Brexit on the United Kingdom remains unclear.”
The IMF left its growth forecast for the UK in 2018 unchanged at 1.5% but said one key risk facing the global economy was that the Brexit talks would end in failure.
The IMF is well known, some would say notorious, for warning before last year’s referendum of the adverse economic consequences of leaving the European Union.
Economists warn that IMF forecasts are not always right.