Research note cuts growth forecasts on both sides of the Atlantic
The United States and the eurozone are “dangerously close to recession,” a Morgan Stanley research note released Thursday said. The note, which added to market jitters, cut the U.S. GDP forecast to 3.9 per cent growth from 4.2 per cent for 2011, and to 3.8 per cent from 4.5 per cent for 2012. It also predicted the European Central Bank would soon cut interest rates in a bid to stave off negative growth. “Our revised forecasts show the U.S. And the euro area are hovering close to a recession — defined as two consecutive quarters of contraction — over the next 6-12 months,” Joachim Fels, from Morgan Stanley’s global economics team said in the note.