The International Monetary Fund has warned that the world stands on the brink of recession and that global trends towards a slump have been worsened by the impact of the terrorist attacks on New York and Washington.

In a blunt and downbeat assessment the IMF predicted yesterday that an already gloomy growth outlook for the global economy now faced the prospect of a "self-reinforcing downturn".

"There is no doubt that the attack is having a negative effect on activity now in many regions of the globe, and that it has increased what were already significant risks to the short-term global outlook, including for emerging economies," said Kenneth Rogoff, the IMF chief economist.

Key US congress members have thrashed-out compromise proposals giving president George W Bush fast track world trade negotiating powers to boost economic confidence.

A MORI poll for the Times finds that confidence in the outlook for UK economy has fallen to its lowest level since the recession of the 1980s - although an EU commission survey of British consumers shows only a small decline in confidence.

The tourism industry faces 30,000 job cuts following the US attacks, warns the British Tourism Authority.