"In the United Kingdom, while second-quarter growth surprised on the upside, more recent data foreshadow a sharp slowdown after the referendum. Further ahead, the outlook will be affected by the degree to which the future relationship with the European Union can preserve the benefits of economic integration and trade," it said in a report ahead fo this week's G20 meeting in China.

"While political uncertainty remains concerning the development of the relationship between the United Kingdom and European Union, short-term turbulence has ebbed."

On the Bank of England's decision to slash interest rates to a fresh low of 0.25pc, it said: "In the United Kingdom, a range of recent monetary and other policy measures by the Bank of England will support the economy and thereby mitigate downside risks."

The IMF's statement comes just over two months after it warned that an "abrupt reaction to an exit vote" could result in "sharp drops in equity and house prices, increased borrowing costs for households and businesses" that would hit growth.

A week before the vote on June 23, the IMF warned that depressed asset prices and slower growth could trigger a "self-reinforcing cycle" that would further weigh on activity.

Report by Szu Ping Chan

UK manufacturing posts biggest rise in 25 years

UK manufacturing activity recorded its biggest month-on-month increase in a quarter of a century in August as production and new orders jumped following the initial shock of the Brexit vote.

Markit's latest survey of the sector showed factories were returning to "business as usual" following a steep downturn in activity immediately after the June 23 vote.

The weaker pound helped to push up overseas orders, while domestic output also bounced back and employment rose for the first time this year.

The survey compiler said the recovery was broad-based, with all three manufacturing sub-sectors returning to growth. The Markit/CIPS UK manufacturing purchasing managers' index rose to 53.3 in August, from 48.2 in July. (Continue reading here)

Pound spikes above $1.33 on UK manufacturing data beat

The pound jumped by as much as 1.35pc to $1.3318 against the dollar this morning after data showed the UK manufacturing sector enjoyed one of its sharpest rebounds on record in August.

The Markit/CIPS PMI index jumped to a 10-month high of 53.3 last month - recovering from a three-year low it touched in July. The pound is now trading at its highest level in four weeks - August 4 when it touched $1.3346.