The Bush administration on Monday stuck to its prediction that the US would not face a recession in 2008. It claimed the economy had a “solid foundation” to guide it through the housing crisis and would be helped by a $170bn fiscal stimulus package later this year.

Edward Lazear, chairman of the White House Council of Economic Advisers, which released its annual report to Congress on Monday, said: “I don’t think we are in a recession right now, and we are not forecasting a recession. We are forecasting slower growth.”