The International Monetary Fund (IMF) has urged chancellor Alistair Darling to avoid gambling with UK’s finances by using his expected autumn overhaul of the Treasury's fiscal rules to try to borrow his way out of economic trouble.

IMF reduced its forecasts for Britain's growth and warned the country faced two years of economic pain, The Times reports.

It said the Treasury was already next year set to breach the rule capping national debt at 40% of GDP as it slid deeper into the red.

The IMF said a range of economic woes would cut UK growth this year to only 1.4% - down from 1.7% it predicted in the spring and far below the chancellor's projected growth of at least 1.75%.

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