OECD says UK growth will slow but will top G7 league

The Organisation of Economic Cooperation and Development (OECD) has said that the UK will be the best performing G7 nation in the second half of 2010 despite a slowing rate of growth.

The body is predicting growth of 0.7% for the UK in the third quarter. The figure has been revised up from an estimate of 0.5% in May. However, if achieved it would still represent a fast slowdown in growth from the 1.2% achieved in the second quarter according to government figures. In the fourth quarter the OECD is predicting even slow growth of 0.4% and this figure has actually been revised down from 0.5%.

The think-tank has consistently urged governments to tighten fiscally but did strike a more cautious note on that score in its latest report.

The report said: 'Recent high-frequency indicators point to a slowdown in the pace of recovery of the world economy that is somewhat more pronounced than previously anticipated. It is not yet clear whether the loss of momentum in the recovery is temporary … or whether it signals greater underlying weaknesses in private spending at a time when public support is being removed.'

The OECD said the US will grow at an annualised rate of 2% in the third quarter but will see its growth slow to 1.2% in the fourth quarter.