LEADING economies are set for a slowdown, the Organisation for Economic Co-operation and Development said yesterday, with the UK faring worse than average.
Recovery across the OECD has hit a “possible peak” with growth on course to stutter in the coming months, the group’s composite leading indicators (CLI) revealed.
The indicators – which are designed to forecast economic activity around six months in advance – printed another decline, dipping to 102.2 in June, down from 102.9 earlier in the year. The 100 mark signals the long term average.
The UK’s prospects appear to be particularly gloomy, with a CLI reading of 101 – also down by 0.3 points on the month, and 1.8 points down on the same time last year. It was the sixth successive month of slowdown for the UK.
“The indicator is now getting down worryingly close to the 100 points level that indicates only flat activity,” said Howard Archer of IHS Global Insight. “In our recently completed August forecast, we project UK GDP growth at just 1.1 per cent in 2011, improving modestly to 1.8 per cent in 2012,” Archer added.
The Bank of England is expected to revise down its forecasts for UK growth tomorrow, when it publishes its latest inflation report.
Italy and France are perilously close to a near-term future of economic stagnation, according to the figures.