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US recession predictions continue

Forecasts of a recession for the US economy have continued this week, with two experts stating their belief that the country may already be in severe trouble.

Standard Chartered Bank chief economist Gerard Lyons said that the US is on its way towards a recession that could last until 2009, Thomson Financial reports.

Speaking at a conference, Mr Lyons predicted that the Federal Reserve will slash interest rates to three per cent over the next five months in order to support growth.

Meanwhile, former Federal Reserve chairman Alan Greenspan told the Wall Street Journal that the odds of the US either being in or heading towards recession "are marginally in that direction".

"The symptoms are clearly there," he added, going on to cite data from the Institute for Supply Management showing a fall in its purchasing managers index, as well as the rise in unemployment recorded in December.

January's interest rate decision will be made at the end of the month.

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