The Organisation for Economic Cooperation and Development (OECD) said Tuesday it forecast a 1.7- percent growth for British economy in 2005, compared to its previous estimate of 2.4 percent made in May.

The OECD made this estimate in its special report for Britain published in October.

It said however British economy should grow by 2.4 percent in 2006 and by 2.7 percent in 2007, due to strengthening investments and exportations.

As to recent calls of British economists for a new interest rate cut by Bank of England after a quarter of percentage point cut in August to 4.50 percent, where they now stand, the OECD recommended the steadiness on the contrary.

Since the inflation has been stronger than preview and in view of a progressive recovery at the beginning of next year, it is not necessary to further reduce the interest rates at the moment, said the Paris-based organization.

On the other hand, the 30-member OECD worried about the country 's public deficit that exceeded in 2004 the ceiling of 3.0 percent of gross domestic product (GDP) set by the EU's 1997 Stability and Growth Pact, which aims to protect the credibility of the euro currency.

"If fiscal developments disappoint relative to the 2005 Budget projections, beyond what can be explained by weaker-than-expected growth, then the government will need to take further measures to achieve a decisive reduction in the deficit," the OECD said.

Source: Xinhua