World economy 'is set for first fall since 1945'

President Robert Zoellick forecast a 1.7% contraction in 2009 compared with growth of 1.9% last year as developing countries slow sharply.

The Organisation for Economic Co-operation and Development says the gross domestic product of the world's 30 biggest nations will fall 4.3% this year and 0.1% next year. In November, it predicted a 0.4% contraction followed by 1.5% growth.

The UK economy - which was forecast earlier to decline by 1.1% - is now thought to be set for a 3.7% fall this year.