The savage slump in the world’s leading economies is set to be even deeper than previously feared, with recovery next year now unlikely to materialise, the International Monetary Fund warned today.

In a grim assessment of global prospects, the IMF once again drastically cut its forecasts for key economies across the world.

It blamed the continuing blight from severe financial stresses for a still worsening global outlook.

For Britain, the fund inflicted a double blow on Alistair Darling minutes after the Chancellor unveiled his Budget.

It predicted that the UK economy would shrink by 4.1 per cent this year — markedly worse than Mr Darling’s own new projection for a 3.5 per cent decline — and said that the recession would drag on into 2010, with a further drop of 0.4 per cent in GDP next year.

The Chancellor has predicted a recovery with 2010 growth of 1.25 per cent.

The fund’s hard-hitting report warned that, despite a blizzard of far-reaching official efforts to bail-out banks and stem financial turmoil, governments had failed to halt a vicious downward spiral as intense financial strains and deteriorating economic conditions feed off each other.

Calling for still more “forceful action” by governments on both sides of the Atlantic, the IMF said that halting the slump in the global economy and restoring growth now depended critically on governments “stepping up efforts to heal the financial sector”.

But a day after the fund predicted that cumulative losses for banks in the US, Europe and Japan from the credit crisis will hit $4 trillion, it also warned that, even if economic recovery is secured, it is set to be anaemic and “sluggish relative to past recoveries”.

The latest IMF forecasts, in its twice-yearly World Economic Outlook, project that what it says will be by far the worst world recession since the Second World War will mean a worldwide plunge in economic output (GDP) of 1.3 per cent.

That compares with its January forecast which foresaw meagre world growth of only 0.5 per cent, still weak enough to be classed as a global recession.

In the leading economies of the West, the IMF expects GDP to plummet this year by a vicious 3.8 per cent, down from the 2 per cent drop it expected in January.