POUND LIVE: Pound RISES as IMF downgrades UK growth

Sterling jumped by 0.3 per cent against the euro to 1.117 and around 0.2 per cent against the dollar to 1.301.

The bounceback comes after the IMF said it now expects the UK economy to grow by 1.7 per cent in 2017, down from a previous prediction of two per cent.

The fund's economy forecasts for next year remain at 1.5 per cent.

Britain's top stock index the FTSE 100 fell around 0.6 per cent amid the downgrade.

In response to the forecast, the Government underlined Britain's strong economy, as employment remains high while unemployment continues to fall.

The IMF downgraded the UK economy following the Brexit vote last year, but was later forced to revise the forecast higher after Britain defied its doom-monger expectations.

A Treasury spokesperson said: "This forecast underscores exactly why our plans to increase productivity and ensure we get the very best deal with the EU, are vitally important.

"Employment is at a record high and the deficit is down by three quarters, showing that the fundamentals of our economy are strong.

"We will continue to deliver greater prosperity and higher living standards for hard working people across the country."