The European economy will continue to slow down this year and next as the US downturn and the turmoil in world financial markets conspire to keep the outlook bleak, the European Commission said on Monday.

In its latest six-monthly forecasts, the Commission said economic growth in the 27-nation European Union would slow to 1.8 per cent in 2009 from 2.0 per cent this year. Growth in the 15-nation eurozone would fall to 1.5 per cent from 1.7 per cent.