The International Monetary Fund (IMF) has downgraded its forecast for the UK economy, predicting that it will shrink by 0.4% this year, not 0.2% as initially stated in July.
The IMF believes that the UK economy should grow by 1.1% next year, although this is down from its previous forecast of 1.4%.
The IMF also downgraded its estimate for global growth.
Hopes for a global economic recovery have weakened according to the IMF, mainly as a result of government policies failing to ignite confidence.
Prime Minister David Cameron defended the claims, declaring: "What is happening is a rebalancing of our economy.
"We need more private sector growth, we need a smaller public sector, we need to make more, sell more overseas and manufacture more.
"It's a slow and difficult healing process, but it is taking place."
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