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The UK economy will shrink and perform worse than other advanced economies, including Russia, as the cost of living continues to hit households, the International Monetary Fund has said.

The IMF said the economy will contract by 0.6% in 2023, rather than grow slightly as previously predicted, BBC News reported.

However, the IMF also said that it thinks the UK is now "on the right track".

Chancellor Jeremy Hunt said the UK outperformed many forecasts last year.

But shadow chancellor Rachel Reeves said the figures showed the UK "lagging behind our peers".

The IMF, which works to stabilise economic growth, said it had downgraded its forecast for the UK because of its high energy prices, rising mortgage costs and increased taxes, as well as persistent worker shortages. It did not mention Brexit in its report as a factor for the UK not performing as well as others. Today marks three years since the UK left the EU.

The UK is expected be the only country to shrink this year across all the advanced and emerging economies. Even sanctions-hit Russia is now forecast to grow this year.