The Organisation for Economic Co-operation and Development (OECD) said the slowdown had been more "pronounced than anticipated".

As a result, it lowered its growth forecast for 2010 for the G7 leading economies to 1.5%, down from 1.75%.

It added the economic outlook was characterised by "great uncertainty".

"The uncertainty is caused by a combination of factors, but it is unlikely that we are heading into another downturn," said the OECD's chief economist Pier Carlo Padoan.

US growth
The group said consumer spending could remain weak, while concerns about high levels of government debt were also serving to constrain growth.

Against this, the group reported more stable financial conditions and strong corporate profits.

It forecast growth in the US at an annualised rate of 2% between August and October, then 1.2% in the final three months of the year.

In the second quarter of this year, the US economy grew at an annualised pace of 1.6%.

The group also forecast a sharp slowdown in some leading European economies, with Germany, France and Italy together growing at an annualised rate of 0.4% in the third quarter and 0.6% in the fourth.

This would represent a sharp turnaround from the second quarter, when some leading European economies grew at a faster pace than the US.

The UK, however, is set for stronger growth than the US, according to OECD forecasts. Its economy could grow by 2.7% between August and October, and by 1.5% in the final quarter, the group said.

From the BBC

Aftershock

Aftershock from the bbc world news

The bbc world news service will soon be showing aftershock. The aftershock season will be aired on the bbc news programmes starting on september 7th and highlight the effects of the global recession.

The BBC's Business Editor Robert Peston will examine what happened and what we've learned since the day the money stopped. In this new documentary, he meets many of the people who witnessed the demise of Lehman's, from bank bosses, to Wall Street Lawyers and Government Regulators and ask them a year on, if anything has changed. How a Bust Bank Changed the World will transmit on BBC World News on 12 September (and BBC World Service’s Business Daily on 15 September).

BBC World News

Marking the start of the week which saw the real crisis in the financial markets, BBC World News begins its extensive news coverage with reports across the globe including Shanghai, Mumbai, New York and Japan. Special reports on how the credit crunch has affected the housing market and small businesses will also be aired from the U.S. in conjunction with Labor Day.

BBC World News' World Business Report

From 06.30 GMT on 10 September, will bring viewers live news from Dalian in China on the World Economic Forum Annual Meeting of New Champions.

India Business Report

 On the weekend of 12 and 13 September, BBC World News' special programme devoted to business news from Mumbai, provides in-depth analysis on the big Indian conglomerates that took advantage of the credit crunch by buying Western companies.
 

 

BBC World News will broadcast a series of live reports

 In an ambitious and truly global production, from the channel's expert presenters across the world on 15 September from 15.00 GMT. Mishal Husain (Singapore), Nik Gowing (Mumbai), Matt Frei (New York) and Jonathan Charles, Lucy Hockings, George Alagiah and Tanya Beckett in (London) will report on: Where is the banking system now and where is it going? What happened to the big Wall Street players? How much did the banks eventually write off and who were the winners and losers? The shifting of power to China and Asia? Could this happen again? And how much did banks eventually write off?

Watch aftershock trailer

Working Lives: Dubai

A co-production with BBC Persian TV, on 12 September. The programme follows the experiences of five people including a taxi driver and a billionaire, who have to deal with life's current economic realities in a land of economic promise

Our World

Hollywood or Bust airs on 16 September and provides an analysis on how Hollywood's movie industry can survive the recession. The programme also broadcasts a candid interview with Sumner Redstone, the head of one of the world's largest media conglomerates, VIACOM.

BBC World News America

Marks the one-year anniversary of the Lehman Brothers collapse and ensuing global economic meltdown with two special programs anchored live from New York by Matt Frei: Monday 14 September (from the BBC’s New York bureau) and Tuesday 15 September (from Wall Street). In addition, special features leading up to the G20 Summit in Pittsburgh include an in-depth report from Washington Correspondent Katty Kay addressing a crucial question: is the U.S. government's massive economic stimulus program actually working? The recovery in China also comes under the spotlight in a report that asks if the Chinese might be replacing America as the world's dominant economic player. And BBC World News America meets three people who personify the links in the financial chain that led to last year’s economic collapse – the American homebuyer, the Wall Street financier who repackaged their subprime mortgage, and the Chinese investor who bought it.

From the bbc

Obama's New Financial Proposal

President obama has announced banking reforms to prevent possible future financial crisis.

The overhaul will require big banks to put more money aside against future losses to curb excessive risk taking.

Consumers will get a special agency to protect their interests and regulate mortgages and credit cards.

In outlining the reforms, President Barack Obama described them as the biggest shake-up of the US system of financial regulation since the 1930s.

The US President said the lack of oversight among finance firms prompted systemic abuse causing risks for both companies and individuals.

"We are working hard to build a new foundation for sustained economic growth. This will not be easy" he said.

"We know that this recession is not a result of one failure but of many. And many of the toughest challenges we face are the product of a cascade of mistakes and missed opportunities which took place over a course of decades."

The aim is to deal with the weaknesses that the sub-prime crisis and the financial meltdown revealed in the fragmented US regulatory system.

"With their proposals today, the administration has moved this critical debate from broad discussion to specific action - this is an important step forward," said Timothy Ryan, chief executive of the Securities Industry and Financial Markets Association.

He said it was a "once-in-a-generation opportunity to rebuild our regulatory structure so that our financial system is more stable, more resilient and better underpins a dynamic US economy".

But not everyone was so positive.

Peter Morici of the Smith School of Business at the University of Maryland described the changes as "a huge bureaucratic overreach that will prove ineffective and too costly".

Consumer protection

In talking about the causes of the financial crisis Mr Obama said complex financial instruments were meant to spread risk but instead concentrated it.

"It was easy money," he said. "But these schemes were built on a pile of sand."

The changes are aimed at dealing with systemic risks that could harm the whole financial system, raising capital requirements for banks, ensuring that the government can take over failing institutions, and protecting consumers and investors.

A new Consumer Financial Protection Agency will be created and the Federal Trade Commission will gain new powers to protect consumers, as well as more powers for the Securities and Exchange Commission, for the benefit of investors.

There will be more regulation of hedge funds, securitised debts and over-the-counter derivatives, all of which have been blamed for exacerbating the financial crisis and leading to a "culture of irresponsibility" that dominated Wall Street, said Mr Obama.

"Mortgage brokers will be held to higher standards, exotic mortgages that hide exploding costs will no longer be the norm, home mortgage disclosures will be reasonable, clearly written, and concise," said Mr Obama said.

And shareholders will be given more power to question executive bonuses.

The reforms will also fulfil the commitments made by the US at the G20 summit in London to join in the worldwide effort to toughen financial regulation.