Christine Lagarde, managing director of the IMF, has issued a stark warning to world markets by claiming the future is “gloomy” and every economy in the world is at risk.
Her comments came as tensions between London and Paris were heightened further after the head of France's central bank suggested that the UK was a candidate for a credit rating downgrade.
Speaking on Thursday Legarde said: "There is no economy in the world, whether low-income countries, emerging markets, middle-income countries or super-advanced economies that will be immune to the crisis that we see not only unfolding but escalating,"
"It is going to require efforts, it is going to require adjustment, and clearly it is going to have to start from the core of the crisis at the moment, which is obviously the European countries and in particular the countries of the eurozone."
Earlier, tensions between London and Paris were heightened further after the head of France's central bank suggested that the UK was a candidate for a credit rating downgrade.
France is bracing itself for the potential loss of its coveted AAA rating after two credit agencies last week indicated they were considering marking down countries across the eurozone.
But Banque de France governor Christian Noyer said they should instead be looking at the UK because of the scale of debt and inflation and the poor levels of growth and bank lending on this side of the Channel.
His comments came a day after President Nicolas Sarkozy was quoted as branding David Cameron an "obstinate kid" for refusing to sign up to a treaty to rescue the euro last week.
Meanwhile, the European Central Bank said in a report on Thursday that Europe needs to adhere to stricter budgetary rules than agreed to at the Brussels summit last week.
And, Mario Draghi, president of the European Central Bank, said in a speech on Thursday that there is "no external savior" for the eurozone and that struggling countries should supposedly save themselves by cutting spending and agreeing to more control of their budgets by the European Union, according to the Associated Press.
"There is no external savior for a country that doesn't want to save itself," Draghi said in Berlin.