British banks will lose $437b

Finance minister Alistair Darling is set to present the spending plan to parliament against the backdrop of a domestic banking crisis, soaring unemployment and public debt, negative inflation and slumping tax revenues. -- PHOTO: ASSOCIATED PRESS

WASHINGTON - THE International Monetary Fund said British banks would be hit slightly more softly by the economic crisis than it previously reported, after correcting data published earlier on Tuesday.

The Washington-based IMF said its statement on Tuesday that the crisis would cost Britain's banks 13.4 per cent of gross domestic product - or around 200 billion pounds (S$437 billion) - by the end of the year was mistaken.

'We have corrected the figure in the table from 13.4 per cent to 9.2 per cent,' IMF spokesman Andreas Adriano told AFP, without confirming what the cost could be in real terms.

That revision would put the loss at closer to 132 billion pounds.

Earlier, the IMF's news that the British banking sector would face larger-than-expected losses piled the pressure on the government in London as it prepared to deliver an annual budget on Wednesday.

Finance minister Alistair Darling is set to present the spending plan to parliament against the backdrop of a domestic banking crisis, soaring unemployment and public debt, negative inflation and slumping tax revenues.

British media reported a government official rejecting the IMF's original figures as 'very high'. The revision will offer a small comfort to global investors who were also told by the IMF on Tuesday that losses from the global financial and economic crisis to total more than four trillion dollars due to writedowns on soured credit.

The IMF said the total estimated cost of US$4.054 trillion (S$6.11 trillion) including US$2.712 trillion in losses in US-originated assets.

Losses on European-originated assets were estimated at US$1.193 trillion and those of Japanese-originated assets at US$149 billion. -- AFP