Belfast Telegraph

UK, eurozone on brink of recovery says OECD

By David Elliot and Stephen Foley

The economies of both the UK and eurozone are on the brink of recovery, according to one of the world's most respected think tanks.

The Organisation for Economic Co-operation and Development (OECD) said both regions had been boosted by the fact that the world's biggest economies, including the US and China, had "regained momentum".

It said the UK was at a "potential turning point" in the release of its composite leading indicators (CLI) which tend to accurately predict the economic outlook for the next six months.

The OECD also said Germany's economy is picking up pace but warned that recovery may be slowing.

"In Germany and the United Kingdom the CLIs continue to show signs of a positive change in momentum but these are weaker than in last month's assessment," it said.

Despite the favourable omens, bankers have warned the debt crisis in Europe hasn't gone away

The world's top banking group warned that eurozone leaders risk reigniting the sovereign debt crisis unless they agree more funds for the so-called 'firewall' designed to calm bond markets.

The Institute of International Finance (IIF), which represents 450 banks and finance houses, said the eurozone must expand the €800bn (£660bn) European Stability Mechanism created to fund bailouts of member countries. Such an expansion is the only way to unlock extra money from the International Monetary Fund and finally remove the possibility of a disorderly break-up of the eurozone, the IIF's managing director, Charles Dallara, said in an open letter to IMF and World Bank leaders.

The IMF and World Bank are meeting in Washington next week, and Mr Dallara's letter puts pressure on finance ministers and central bankers to do more to stabilise the banking system and pull the eurozone out of recession.