View more on these topics

OECD warns of European recession risk

The Organisation for Economic Co-operation and Development is warning that the euro area is set to enter recession and that policies need to be put in place urgently to stop the sovereign debt crisis from spreading.

In its latest economic outlook report, the OECD says that if not addressed, recent contagion to European countries thought to have relatively solid public finances could hugely escalate economic disruption.

It says that pressures on bank funding and balance sheets increase the risk of a credit crunch.

Pier Carlo Padoan, chief economist at the OECD, says that prospects will only improve if decisive action is taken quickly.

He says: “In the euro area, the risk of contagion needs to be stemmed through a substantial increase in the capacity of the European Financial Stability Fund, together with a greater ability to call on the European Central Bank’s balance sheet.

“Much greater firepower must be accompanied by governance reforms to offset the risk of moral hazard.”

Padoan adds: “We are concerned that policy-makers fail to see the urgency of taking decisive action to tackle the real and growing risks to the global economy. We see the US  growth recovering only slowly, the euro area entering into mild recession and Japan growing faster because of reconstruction, but this boost is temporary and will fade away.”

The OECD says that eurozone GDP growth is forecast to slow down from 1.6 per cent this year to 0.2 per cent next year, before picking up to 1.4 per cent in 2013.


Mutuals’ gross lending up 15% year-on-year

Gross lending by building societies for the first 10 months of the year increased 15 per cent compared to the year before. In 2010, gross lending by building societies reached £16.6bn between January and October, compared to £19.1bn over the same period this year. Gross lending in October increased 20 per cent compared to the […]

Blend ambition

Mixing tax wrappers demonstrates the value of good advice

Potter: Equities are better value than bonds

Thames River multi-manager Gary Potter has warned investors to avoid jumping on the “bond bandwagon” and instead invest in equities. Speaking to Money Marketing at the Cofunds investment forum in Hertfordshire last week, Potter (pictured) said there is currently a perception that bonds are the only place to invest due to market volatility. He said: […]


Reports suggest Govt to delay auto-enrolment for small firms

The Government is set to delay the introduction of auto-enrolment for small firms by one year, according to the Daily Mail. The paper reports the Government will announce in its autumn statement on Tuesday that firms with less than 40 employees will be given an extra year to comply with the new rules. Under the […]


News and expert analysis straight to your inbox

Sign up


    Leave a comment