Coming just hours after George Osborne complacently insisted he would cling on to his failing plan, these downgraded IMF forecasts are another damaging blow to the government's economic credibility.
Twelve months ago the IMF forecast growth of 1.6 per cent in 2012 and said a plan B would be needed if growth were to be lower than expected. A year on, with Britain in a double-dip recession, borrowing rising as a result and growth forecast to be minus 0.4 per cent, there can be no question that a change of course is urgently needed.
Sir Mervyn King will concede there might be occasions when the Bank of England should 'aim off' the 2% inflation target.
It is the kind of message we have heard from the IMF before - think about having a Plan B ready, but don't press the button yet.