Bleak outlook as forecast for global growth is cut by IMF

The International Monetary Fund (IMF) is expected to reduce its outlook for the global economy today, amid continuing financial woes in Europe, the stagnant US economy and slowing growth in China.

The IMF, which works with 188 countries to encourage global monetary cooperation, will publish an update to its World Economic Outlook this afternoon.

Last week, managing director Christine Lagarde, below, said that the global growth outlook will be "somewhat less than we anticipated just three months ago", hinting that the IMF's earlier forecasts of 3.5 per cent growth this year would have to be revised downwards.

This week will also see an update for the US economy in the shape of the Federal Reserve Chairman Ben Bernanke's US monetary policy report to the Senate and House of Representatives committees tomorrow and Wednesday.

Analysts believe Bernanke is unlikely to reveal plans of further economic stimulus despite minutes from the Fed's June meeting that showed policymakers have been looking at that option.

Despite a run of weak US economic numbers, a glimmer of hope may emerge today with June's car sales data. Experts have predicted that June automobile sales in the US are likely to show a rise for the first time in three months. A projected 0.2 per cent gain in purchases would follow a 0.2 per cent decline in May.