OECD slashes US growth forecast

The OECD has slashed its growth forecast for the US economy and hardly expects it to grow at all in the first six months of 2008.

But the OECD says it is "premature" to say the US is in recession.

Among countries that use the euro, it raised its growth forecast for the first quarter from 0.4% to 0.5%.

'Moving sideways'

But for the second quarter of 2008 it lowered its forecast from 0.5% to 0.4%.

The report forecast UK growth of 0.6% in the first quarter.

OECD chief economist Jorgen Elmeskov said the Bank of England should be cautious, given the solid growth and worries over inflation.

The research group said the US economy is, "essentially moving sideways, if not contracting outright".

The OECD, which represents the 30 most advanced industrial countries, now expects the US economy to grow just 0.1% in the first three months of this year, down from its original 0.3% forecast.

In the second three months, it reduced its forecast to zero growth, down from 0.4%.

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