OECD warns of a sharp slowdown in global growth

Leading indicators of Paris-based organisation all show declining activity

The global economy is still slowing, according to a new report from the Organisation for Economic Co-operation and Development, fuelling fears that countries such as the UK are heading back into recession.

The Paris-based organisation says that every country it monitors experienced a slowdown in economic activity during September, according to its composite of leading economic indicators (CLIs). "Compared to last month's assessment, the CLIs point more strongly to slowdowns in all major economies," the OECD said.

The latest survey shows the UK, France, Germany, Italy, Canada, China, India and Brazil all falling below their long-term trend (indicated by a CLI index reading of 100). The OECD's indicators anticipate turning points in economic activity relative to trend. A turnaround in an indicator tends to precede turning points in economic activity by about six months.

Howard Archer, the chief UK economist from IHS Global Insight, said that the latest OECD figures were particularly worrying news for the British economy. He said: "The further deterioration in the OECD leading indicator in September to be clearly below 100 ties in with mounting concern that the UK could be heading back into recession."

Japan, Russia and the US managed to stay above the long-term trend on the OECD's indicators. And there was some encouraging news from Japan yesterday as it registered GDP growth in the third quarter of 1.5 per cent, as production bounced back after March's tsunami and nuclear disaster.

But the Japanese economy minister, Motohisa Furukawa, warned that there are still potential future shocks looming for Japan. He said that policymakers need to "pay adequate attention to downside risks, such as possible deterioration in foreign economies, rapid appreciation in the yen and the impact of damage from the Thai floods".

And the depressing picture for Europe was reinforced by eurozone industrial production figures from Eurostat yesterday, which showed a 2 per cent fall in September on the previous month – the biggest monthly decline since September 2009. Overall, production of capital goods dropped by 4.2 per cent while output of durable consumer goods slid by 3.8 per cent, after rising in previous months. Energy production slipped by 1.4 per cent. Industrial production in Italy was down 4.8 per cent. In Portugal it was down 5.8 per cent and 2.9 per cent in Germany. Estonia registered a 10.9 per cent decline.

Elsewhere in Asia, Indian inflation remained broadly unchanged in September, at an uncomfortably high 9.73 per cent. This is the 11th straight month that year-on-year price increases have exceeded 9 per cent. High inflation limits the scope for the Indian central bank to cut policy rates and help the country cope with the economic disruption of the global slowdown. At the end of last month, the OECD slashed its 2012 growth estimate for the United States to 1.8 per cent from 3.1 per cent and cut its forecast for growth in the eurozone next year to 0.3 per cent from 2.0 per cent in May.

Suggested Topics
Start your day with The Independent, sign up for daily news emails
Kim Wilde began gardening in the 1990s when she moved to the countryside
peopleThe singer is leading an appeal for the charity Thrive, which uses the therapy of horticulture
Alexis Sanchez celebrates scoring a second for Arsenal against Reading
Life and Style
An easy-peel potato; Dave Hax has come up with an ingenious method in food preparation
voicesDave Hax's domestic tips are reminiscent of George Orwell's tea routine. The world might need revolution, but we like to sweat the small stuff, says DJ Taylor
Japan's population is projected to fall dramatically in the next 50 years (Wikimedia)
ebooksA special investigation by Andy McSmith
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE £45,000: SThree: SThree Group have been well e...

Ashdown Group: IT Manager / Development Manager - NW London - £58k + 15% bonus

£50000 - £667000 per annum + excellent benefits : Ashdown Group: IT Manager / ...

Recruitment Genius: Sales Consultant / Telemarketer - OTE £20,000

£13000 - £20000 per annum: Recruitment Genius: Scotland's leading life insuran...

Ashdown Group: Training Programme Manager - City, London

£40000 - £45000 per annum + benefits : Ashdown Group: Training Programme Manag...

Day In a Page

NHS struggling to monitor the safety and efficacy of its services outsourced to private providers

Who's monitoring the outsourced NHS services?

A report finds that private firms are not being properly assessed for their quality of care
Zac Goldsmith: 'I'll trigger a by-election over Heathrow'

Zac Goldsmith: 'I'll trigger a by-election over Heathrow'

The Tory MP said he did not want to stand again unless his party's manifesto ruled out a third runway. But he's doing so. Watch this space
How do Greek voters feel about Syriza's backtracking on its anti-austerity pledge?

How do Greeks feel about Syriza?

Five voters from different backgrounds tell us what they expect from Syriza's charismatic leader Alexis Tsipras
From Iraq to Libya and Syria: The wars that come back to haunt us

The wars that come back to haunt us

David Cameron should not escape blame for his role in conflicts that are still raging, argues Patrick Cockburn
Sam Baker and Lauren Laverne: Too busy to surf? Head to The Pool

Too busy to surf? Head to The Pool

A new website is trying to declutter the internet to help busy women. Holly Williams meets the founders
Heston Blumenthal to cook up a spice odyssey for British astronaut manning the International Space Station

UK's Major Tum to blast off on a spice odyssey

Nothing but the best for British astronaut as chef Heston Blumenthal cooks up his rations
John Harrison's 'longitude' clock sets new record - 300 years on

‘Longitude’ clock sets new record - 300 years on

Greenwich horologists celebrate as it keeps to within a second of real time over a 100-day test
Fears in the US of being outgunned in the vital propaganda wars by Russia, China - and even Isis - have prompted a rethink on overseas broadcasters

Let the propaganda wars begin - again

'Accurate, objective, comprehensive': that was Voice of America's creed, but now its masters want it to promote US policy, reports Rupert Cornwell
Why Japan's incredible long-distance runners will never win the London Marathon

Japan's incredible long-distance runners

Every year, Japanese long-distance runners post some of the world's fastest times – yet, come next weekend, not a single elite competitor from the country will be at the London Marathon
Why does Tom Drury remain the greatest writer you've never heard of?

Tom Drury: The quiet American

His debut was considered one of the finest novels of the past 50 years, and he is every bit the equal of his contemporaries, Jonathan Franzen, Dave Eggers and David Foster Wallace
You should judge a person by how they peel a potato

You should judge a person by how they peel a potato

Dave Hax's domestic tips are reminiscent of George Orwell's tea routine. The world might need revolution, but we like to sweat the small stuff, says DJ Taylor
Beige is back: The drab car colours of the 1970s are proving popular again

Beige to the future

Flares and flounce are back on catwalks but a revival in ’70s car paintjobs was a stack-heeled step too far – until now
Bill Granger recipes: Our chef's dishes highlight the delicate essence of fresh cheeses

Bill Granger cooks with fresh cheeses

More delicate on the palate, milder, fresh cheeses can also be kinder to the waistline
Aston Villa vs Liverpool: 'This FA Cup run has been wonderful,' says veteran Shay Given

Shay Given: 'This FA Cup run has been wonderful'

The Villa keeper has been overlooked for a long time and has unhappy memories of the national stadium – but he is savouring his chance to play at Wembley
Timeless drama of Championship race in league of its own - Michael Calvin

Michael Calvin's Last Word

Timeless drama of Championship race in league of its own