Greek eonomy shrank 3.7 per cent as consumption slumped

Greece's austerity-hit economy shrank at an annual rate of 3.7 per cent in the second quarter, a faster pace than previously thought, as consumption slumped. Household spending eroded at a record annual clip of 4.2 per cent in the quarter.

The country, which is looking to slash its budget deficit from 13.6 per cent last year to less than 3 per cent in 2014, has cut public sector wages by 15 per cent and pensions by 10 per cent. VAT is up to 23 per cent.

Large protests are expected at the weekend when the Prime Minister is set to unveil his annual economic policy speech.