PARIS (AFP) — The Organisation for Economic Cooperation and Development on Tuesday slashed its forecast for growth in the eurozone this year, with Britain coming worst off with a slide into recession in the second half of 2008.
According to the OECD, the Paris-based grouping of 30 developed countries, the British economy was seen contracting by between 0.3 and 1.2 percent in the third quarter, and by between 0.4 and 1.2 percent in the fourth.
A recession is defined technically as two consecutive quarters of negative growth.
For the full-year, Britain's economy would post growth of only 1.2 percent, down from its June estimate of 1.8 percent, the OECD said.
The OECD said the revised British figures took into account property prices, reflecting the impact the badly hit housing sector is having on the overall economy.
Jean-Louis Schneider, deputy director of the OECD economics department, said the British economy had been under pressure for two quarters, and "our models suggest that with this sort of dynamic, it is very unlikely to stop there," he told AFP.
An interim assessment of leading OECD countries found that the combined economy of Group of Seven nations, the world's leading industrialised democracies, was forecast to grow by 1.4 percent, unchanged from the last analysis by the OECD in June.
In Europe, the downward revision was due to second quarter figures which surprised on the downside, Schneider said.
The eurozone economy contracted 0.2 percent in the second quarter compared with the first, according to official data.
"In the euro area and its three largest economies, as well as in the United Kingdom, activity is foreseen to remain broadly flat," an OECD statement said. On monetary policy, the OECD argued in favour of keeping interest rates on hold in the eurozone.
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