The 30 member-states of the Organisation for Economic Co-operation and Development narrowly avoided stagnating in the three months to the end of June, according to the latest data.

New figures show OECD growth was up only 0.1 per cent in the second quarter over the previous quarter, the lowest figure for a three-month period since 1995.

US growth remained positive, compared with the second quarter in 2000, although annual growth slowed to 1.2 per cent in the second quarter from 2.5 per cent in the previous quarter.

But concern has been mounting that the US will slip into at least a short-term recession following the terrorist attacks on New York and Washington. US Treasury Secretary Mr Paul O'Neill, however, has remained upbeat about the prospects for a speedy recovery in the US next year, saying that growth could reach 3.2 per cent next year.

The US authorities are hoping that the combination of cutting interest rates, pouring money into the markets and huge defence and foreign spending will boost the economy next year.

It is understood that the US Federal Reserve is determined to keep cutting interest rates and pouring liquidity into the market through a combination of credit lines and threatening financial institutions which withdraw such lines.

It is possible that direct corporate borrowing from the Fed may even be approved. In addition the fiscal or tax and spending side of the economy will be primed.

Possibilities such as payroll tax suspension are being discussed as well as specific sectoral supports.

However, the real boost is likely to come from immense defence spending.

So far the massive injection of liquidity has kept the financial markets reasonably stable.

However, the $1 trillion (€1.07 trillion) a day foreign exchange markets have still not returned to complete normality.

"Things are getting better than they were. We're maybe more than halfway back to normal but it's difficult to say," said Mr Russell Jones, global head of foreign exchange research at Lehman Brothers.

But traders said the market was very jumpy because no one could be certain what would happen next. At the same time the British Chancellor of the Exchequer, Mr Gordon Brown, urged concerted action to cut off the supply of funds to terrorists.

Barclays said yesterday that it had frozen a bank account which had been inactive for some time and is thought to have belonged to a person with links to Osama bin Laden, the chief suspect in last week's terrorist attacks in the US.

Mr Brown urged other states, especially those with strong banking secrecy codes such as Switzerland, to follow suit.

He said financial institutions had also received a list of individuals whom the British government wants to investigate in relation to last week's attacks in New York and Washington.

"We want joint action to cut off the supply of funds to terrorists," he said.

"They're being financed somewhere and get their money through bank accounts which we can stop."