European Commission slashes growth forecasts

The European Commission has revised down its economic growth forecast for the rest of the year, saying growth in the eurozone will grind to a "virtual standstill".

The Commission halved its forecast for July to September to just 0.2%, while the forecast for the last three months of the year is four times lower, down from 0.4% to 0.1%. It blamed financial market turbulence over the summer months, combined with weakening demand from outside Europe. However, the body said it is confident Europe willl not slide back into recession. "Growth in the second half of 2011 is now expected to be subdued, coming to a virtual standstill towards the end of the year. "The soft patch predicted in the spring forecast is now likely to deepen but will not result...