In a remarkable U-turn, the International Monetary Fund’s chief economist urged the rest of Europe to continue with painful UK-style austerity measures to restore trust in their economies.

The plea was a turnaround for French economist Olivier Blanchard who just 18 months ago attacked Britain for “playing with fire” by pursuing exactly that strategy.

In its quarterly outlook, the IMF highlighted “weak” growth in the eurozone and forecast that Germany’s once powerhouse economy would expand this year by 1.4 per cent, a downgrade of half a percentage point since the IMF’s July report.

France’s projected growth was halved to 0.4 per cent while Italy is forecast to shrink by 0.2 per cent after a half-point downgrade.  By contrast, the IMF forecasts Britain to grow 3.2 per cent this year and 2.7 per cent next year.

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“Among advanced economies, the United States and the United Kingdom in particular are leaving the crisis behind and achieving decent growth — though even for those two countries, potential growth is now lower than in the early 2000s,” said Mr Blanchard.

He warned that world growth was “mediocre” and patchy and said that the euro area needed to continue taking politically difficult measures to rebalance their finances. “The weak recovery in the euro area has triggered a new debate about the stance of fiscal policy,” he said.

Chancellor George Osborne said: “The IMF has today confirmed that they expect the UK to be the fastest growing major advanced economy this year, providing further evidence that the Government’s long-term economic plan is working.

“But the IMF also highlight the risks to our recovery from the rest of the world, showing exactly why we must keep working through the long-term plan that is delivering a resilient economy and a brighter future.”

However, for Britain, the IMF highlighted the risk of the housing and property market overheating. “House prices, however, have increased by 10 present across the country — in London, more than double that — and household debt, at 140 per cent of gross disposable income, remains high,” said the report.