THE ECONOMIC slowdown is set to be even sharper than expected, according to forward-looking data released yesterday by the Organisation for Economic Cooperation and Development (OECD).
A fourth consecutive month of decline in the OECD area was recorded in the leading indicators for July, while the UK’s indicators have fallen for six straight months.
The indicators aim to predict economic turning points six months in advance.
“The further deterioration in the OECD leading indictor for the UK ties in the current softness of the UK economy and the increasingly worrying outlook,” said Howard Archer of IHS Global Insight.
“We project UK GDP growth at just one per cent in 2011, improving modestly to 1.5 per cent in 2012,” Archer said, while stressing risks to the downside.
The UK’s indicator slipped by half a point between June and July, its sharpest decline of the year.
The UK’s score came in at 100.4 – only marginally above the 100 mark that predicts stagnation six months ahead.
Across the OECD as a whole the outlook also slipped by half a point, yet remains healthier at 101.6.
However, some peer countries have worse prospects than the UK, according to the data. France is set for stagnation towards the end of the year, while Canada, with a reading of 99.7, is set for economic decline.
The outlook for Germany, Europe’s powerhouse economy for much of the recovery, has collapsed, the OECD said.
Germany’s indicator has fallen more than 2.5 points in the last three months, so that the country is on course for only modest growth towards the end of the year.
Developing economies, too, have taken a hit. Brazil and India’s scores suffered falls of 6.4 points and 6.2 points respectively over the last year.