The UK will be the fastest growing major economy this year, according to the International Monetary Fund, as it rowed back on predictions that a vote to leave the European Union could plunge the country into recession and trigger a stock market crash.

Action taken by the Bank of England following the Brexit vote, including cutting interest rates and freeing up more cash for banks to lend had helped to "maintain confidence" in the economy, the IMF said in its latest World Economic Outlook.

The Fund expects the UK economy to grow by 1.8pc in 2016. This is slightly higher than its forecast of 1.7pc in July, and puts the country on course to be the fastest growing G7 economy this year.

It kept its forecast for global growth unchanged at 3.1pc, which represents the slowest pace of growth since the financial crisis.

In a series of warnings on Tuesday, the IMF: