EC set to lower growth forecast

The European Commission is to lower its forecast for economic growth this year when it issues new projections next month, according to Commission President Jose Barroso.

Speaking at a conference in Brussels earlier today, Mr Barroso said although growth forecasts in February are likely to be revised slightly downwards, it was not time "to run for the lifeboats".

He conceded that problems in the US economy would impact the global economy but said the fundamentals were sound in the euro zone.

"It's impossible for Europe to be completely immune if there's a recession in the US. We don't recommend to go now for an artificial stimulus package like the $150 billion US plan proposed by the Bush administration," he added.

He said European nations should continue to improve the competitiveness of their economies.

Mr Barroso is in London for a meeting aimed at crafting an EU response to the tension in financial markets

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