<b></b><p></p><p><b><b>John Stewart analyses the latest forecasts for the world economy and the impact of any downturn on the UK housing market</b></b><br><b>In the three months since September 11, the international economic outlook has deteriorated and uncertainty has increased. US gross domestic product fell in the third quarter and is expected to fall again in the fourth quarter. If so, technically the US will be in recession. The US matters to the rest of the world because its economy accounts for 22% of the global economy, and US exports make up 14% of global exports.</b><br><b><b>Enormous uncertainties</b></b><br> The latest Bank of England <i>Inflation Report</i> examines the rapidly changing views about US economic prospects. In early July, the consensus forecast was for GDP growth of 2.9% in 2002. By early October this had fallen to 1.2%. Such a dramatic reappraisal in the space of only three months highlights the enormous uncertainties attached to current forecasts.</p><p>The Japanese economy, the world&amp;’s second largest, has slipped into its fourth recession in a decade. In its October <i>World Economic Outlook</i>, prepared before September 11, the IMF referred to the sombre short-term outlook for Japan, forecasting a 0.9% decline in GDP in 2001, and growth of only 1.0% in …