The US housing downturn will provoke a “mild” but short-lived world economic slowdown next year, the Paris-based Organisation for Economic and Co-Operation said on Tuesday, as it downgraded its growth forecast for the world’s wealthiest nations.

In its twice-yearly Economic Outlook, the organisation charged with improving the economic prospects of its 30 member states, said it now expected growth of 2.5 per cent in the OECD area, down 0.4 percentage points from its May projection, but forecast a bounce back to 2.7 per cent in 2008.