Global growth is set to hit a 10-year low as Trump's trade war drags down economy

• Global growth is expected to slow this year to a pace not seen since the financial crisis, the Organization for Economic Cooperation and Development said Thursday.
• The US-China trade dispute has increasingly threatened the outlook in the largest economies and elsewhere.
• "The uncertainty provoked by the continuing trade tensions has been long-lasting, reducing activity worldwide and jeopardising our economic future," said Laurence Boone, the chief economist at the OECD.
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Global growth is expected to slow this year to a pace not seen since the financial crisis, the Organization for Economic Cooperation and Development said Thursday. The new data comes as the US-China trade dispute increasingly threatens the outlook in the largest economies and elsewhere.

The world economy will expand by 2.9% in 2019, the OECD projects, the weakest annual growth rate in a decade. Output could fall further in 2020 if the effects of tariffs worsen, the Paris-based organization said, or remain low at 3%.

"The global economy is facing increasingly serious headwinds and slow growth is becoming worryingly entrenched," said Laurence Boone, the chief economist at the OECD. "The uncertainty provoked by the continuing trade tensions has been long-lasting, reducing activity worldwide and jeopardising our economic future."

The OECD also said that uncertainty surrounding Brexit had dimmed the outlook, warning that if the UK were to leave the European Union without a deal it could significantly chip away at output.

The US and China have slapped tariffs on thousands of each other's products and vowed to further expand those punitive measures in the coming months. The next scheduled rounds of escalations in October and December are expected to target far more consumer products than before, issuing a more direct blow to businesses and households.

"While solid consumer demand has supported service sector output to date, persistent weakness in manufacturing sectors and continuing trade tensions could weaken employment growth, household income and spending," the OECD report said.

The organization dimmed its outlook for US growth, predicting it would slow to 2.4% this year and 2% in 2020.

The Federal Reserve similarly lowered its growth forecasts for the US this year on the back of trade tensions, which the Trump administration asserted was necessary to win fairer policies from China and others. The central bank lowered interest rates in July and September, its first attempt to aid the economy since the financial crisis.

"Trade policy tensions have waxed and waned, and elevated uncertainty is weighing on US investments and exports," Fed Chairman Jay Powell said Wednesday. "Our business contacts around the country have been telling us that uncertainty about trade policy has discouraged them from investing in their businesses."

Read more: The Fed cuts rates for 2nd time since financial crisis - but defies Trump's calls for 'big' stimulus