OECD sees global economies facing slowdown

None of the world's major economies will escape a slowdown, a leading economic think tank has said, as fears grow that the world is headed for another recession.

The Organisation for Economic Co-operation and Development said its composite leading indicators (CLI) for its members fell for the seventh straight month, to 100.4 in September.

The reading fell from 100.9 in August and hit the lowest level seen since December 2009.

Readings for individual countries and big developing world economies were broadly lower at levels indicating slowdowns, and were in many cases below their long-term averages.

"Compared to last month's assessment, the CLIs point more strongly to slowdowns in all major economies," the OECD said in a statement.

The UK’s indicator fell for a seventh successive month in September, with the pace of decline accelerating.

The reading fell 0.8 per cent to 99.0 in September from 99.8 in August as the OECD said it pointed to “activity falling below long-term trend".

Howard Archer, chief UK economist at IHS Global Insight, said he expected the UK to grow at just 0.9 per cent in 2011 and 0.8 per cent in 2012.

He said the indicator reading “fuels mounting concerns that the economy is in serious danger of relapsing back into recession.”

“We currently expect the economy to be stagnant over the fourth quarter of 2011 and the first quarter of 2012 before returning to gradual growth, but it is very possible that contraction will occur especially if there is no significant, sustained easing in the Eurozone’s sovereign debt problems,” he said.

The OECD CLIs are designed to anticipate turning points in economic activity relative to trend - a turnaround in an indicator tends to precede turning points in economic activity by around six months.

Economic momentum in the US eased only slightly, according to the OECD's indicator, which fell to 101.2 from 101.5.

The Chinese economy also showed only marginally weaker activity with a reading of 99.8, down from 99.9.