Alistair Darling was thrown on the defensive again today after the International Monetary Fund threw its weight behind challenges to his forecasts for Britain’s economy as too optimistic.

The IMF cut its forecasts for UK prospects both this year and next, drastically downgrading the outlook for next year in a blow to the Chancellor’s hopes for a rapid revival from what is expected to be an anaemic 2008.

The Fund now expects Britain to see economic growth of 1.6 per cent, down from its October projection of a 1.8 per cent expansion and below the bottom end of the Chancellor’s forecast range of 1.75 to 2.25 per cent.

But the bigger blow to the credibility of Mr Darling’s assessment was over his upbeat prognosis for next year, the possible year of the next general election, when he is counting on a recovery to see growth of 2.25 to 2.75 per cent. The top end of that forecast would mark a return to the economy’s long-term average performance.

But the IMF says 2009 growth could remain stuck at a lacklustre 1.6 per cent - down from the more buoyant 2.4 per cent that it believed would be achieved in October.

“Only a moderate recovery is foreseen for 2009,” the IMF said in its twice-yearly World Economic Outlook.

The challenge to Mr Darling’s rosier view came just days after the influential Commons Treasury Committee accused him of over-optimism. Most City economists also believe the Chancellor’s projections are too upbeat.

But Mr Darling yesterday defied his critics including the IMF and insisted that he would stick by his Budget forecasts, and noted that the fund had downgraded forecasts for the other leading economies more drastically. .

“The IMF has downgraded every country’s growth forecasts,” Mr Darling said on BBC Radio’s Today programme. “It’s not surprising. We must not be complacent about what is happening at the moment.

“I remain optimistic that, provided we stick to the course we have set out and that we keep doing the right things, the economy will continue to grow,” he said. “I made my (growth) forecast in the Budget and we stand by that.”

In today’s report the IMF’s renews its recent warnings over the vulnerability of Britain’s house prices to a correction after the runaway boom of the past decade, and sounds a warning that thse are more exposed in the face of stresses in lending markets.

“A slowdown in mortgage lending could accelerate the so-far gradual adjustment of housing prices in a number of countries with elevated valuations (such as … the United Kingdom),” the IMF said.

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