The result means that Frans Griffioen's side will end up in 16th place, regardless of the outcome of their tournament finale against Portugal on Sunday.
However it gave Italy the victory they needed to secure their place in Division A next summer, using a late burst to see off brave Britain who went toe to toe with their opponents for long spells.
The Italians opened up with an 11-4 run but McGarrachan inspired a quick rally with Cheridene Green converting a three-point play to draw GB level late in the opening quarter.
And their best spell lay ahead with Hurd sparking a burst of eleven unanswered points as the Italians were held scoreless for almost five minutes as Britain surged 30-21 clear with 3:51 left in the second.
But a 10-2 reply helped to cut the deficit to 33-31 at half-time and amid a tight third quarter, Francesca Dotto inspired a 6-0 run that took Italy ahead for good.
GB - who won the game's rebounding battle 43-30 - trailed 47-45 at the outset of the fourth but an 11-4 burst from their rivals sealed their fate.
Dotto had a game-high 23 points for the Italians, whose triumph condemned Latvia to join already-relegated Portugal and Britain in Division B in 2013.
