Most of the world's major industrialised countries are growing at their fastest rate in over a decade, but inflationary dangers lurk in both the United States and Europe, the OECD warned yesterday.

The Organisation for Economic Co-operation and Development also said at a ministerial meeting that Japan needed to stick to a loose monetary policy to support its sputtering recovery.

The OECD's 29 member governments said that while globalisation had brought many of their citizens unprecedented prosperity, policies to promote sustainable development and social cohesion are a high priority if that growth is to be fairly spread, and maintained.

"Ministers recognised the serious concerns felt by many at the economic and technological changes under way, and the importance of addressing these concerns locally, nationally and internationally," the group said.

In a communique agreed by all its members, the OECD said US fiscal policy should not be relaxed and that saving rates needed to increase.

In Europe, it added that recent tax and other unexpected revenue windfalls should be used by governments to lower public debt, while structural reforms were still needed to put eurozone economies on to a path of higher sustained growth.