The OCED has issued a warning that the UK and the eurozone in general may be entering another recession and given this fact has cut its forecast for global growth. The OCED predicts that the eurozone will shrink over the last quarter of the year by about one percent and by another .4% by the close of 2012’s first quarter.
In a separate announcement, Mervyn King, the Bank of England governor, told a special MP committee that growth will be close to zero or flat over the course of the next six months. King said that he had not yet read over the report issued by the OCED when he spoke to the Treasury Select Committee, but was aware that the output growth for the next quarter is much weaker than it was just three months ago.
In addition, the OCED report lowered its global economic growth prediction down to 3.8% by the end of this year and then lowered to 3.4% for 2012. The organisation also warned that a global contraction was possible if a negative event such as the default of Spain or Italy were to happen.
The OCED not only represents wealthy countries that are part of the eurozone, but also Japan and the US, meaning that the growth prospects are lowered all over the world. The organisation was very serious in its warning stating that world economic prospects for the next several years will be very dependent on events and that just a small upset could change the economic future.