The European Commission downgraded its expectations for the second half of the year from its spring forecast, citing the banking crisis in the eurozone and the global economic slowdown.
Forecasts of a 1.6pc growth in GDP in the eurozone and 1.7pc in the EU are unchanged but the Commission has put its GDP growth forecast for the third and fourth quarters down by 0.2 and 0.3 percentage points respectively.
Announcing the interim report, EU economic affairs commissioner Olli Rehn said: “The key findings are that economic growth in the European Union is expected to come to a virtual standstill towards the end of the year. Compared to our Spring forecast, prospects are gloomier and risks to the growth outlook are tilted to the downside.”
The Commission said growth had “softened” in the second quarter as risks to the recovery increased.