OECD says a return to recession 'unlikely'

The global economic recovery is slowing faster than forecast, but a return to recession is unlikely, according to the OECD.

The organisation's latest Interim Economic Assessment forecasts growth in the group of seven countries will be about 1.5% on an annualised basis in H2.

This is down from the estimate of 1.75% that had been predicted in the OECD's last economic outlook in May.

Although consumer spending continues to be a drag on economies around the world, the OECD concludes overall financial conditions appear to have stabilised and points out there is still significant growth in the emerging economies.

Pier Carlo Padoan, OECD chief economist, says: "The uncertainty is caused by a combination of both positive and negative factors. But it is unlikely that we are heading into another downturn."

He adds additional quantitative easing may be needed to stimulate economies if growth does not pick up, while he also suggests interest rates may have to remain at their low levels.