There are some grim predictions for Italy’s economy from the International Monetary Fund. It sees growth of less than one percent this year and not much better next year.

The reason is Britain’s decision to leave the European Union which the IMF said has heightened financial market volatility and increased the risks for Italy.

Italy’s banks are a particular threat to the economic outlook, the IMF considers.

They are stuck with at least 360 billion euro of loans that are unlikley to be repaid and share prices for the sector have more than halved this year.

There are talks going on between the Italian government and the European Commission about state bail-outs for the worst hit banks.

But they are stalled on whether the banks’ bond and shareholders should face losses.