Growth in US economy almost zero

The Chairman of the United States Federal Reserve, Alan Greenspan, says growth in the US economy has now slowed down to almost zero.

Correspondents say the dramatic slowdown makes it more likely that the Federal Reserve will cut interest rates soon.

Mr Greenspan also said he was in favour of using the current budget surplus to cut taxes, as well as for reducing the national debt. A year ago, Mr Greenspan had said any budget surplus should be used only to pay off the national debt. However, he did not endorse specific plans by President George W.Bush for widespread tax cuts, and said cuts should not be used as a quick fix. The BBC Washington correspondent says that, overall, Mr Greenspan sounded positive about the potential effect of tax cuts on the US economy.

From the newsroom of the BBC World Service