George Soros, the US financier, yesterday predicted that the US economy could suffer a recession in 2007 owing to falling housing prices as the US tightens interest rates, with a "reasonably significant chance" that the global economy could slow as a result.

There was a risk that the US Federal Reserve would raise interest rates more than necessary to curb inflation, resulting in a hard landing for the US economy, Mr Soros told a forum of the Singapore Institute of International Affairs. He expected the federal fund rate to peak at 4.75 per cent, up from 4.25 per cent.