Watch: International Monetary Fund says UK is the only major economy that will shrink in 2023

The International Monetary Fund (IMF) has downgraded its forecast for the UK economy, saying it will contract by 0.6% in 2023, due to high energy prices, rising mortgage costs, increased taxes, and worker shortages.

The UK is expected to be the only advanced economy to shrink next year. IMF chief economist Pierre-Olivier Gourinchas said the UK is "on the right track" with government plans since November but is affected by its "high dependence" on expensive liquid natural gas.

Chancellor Jeremy Hunt said the IMF's figures confirm the UK is not immune to global pressures, but said the UK outperformed many forecasts last year and is still expected to grow faster than Germany and Japan over the coming years. In contrast, the IMF predicts economic growth of 1.4% in the US, 0.1% in Germany, and 0.7% in France.