stagflation

BASEL, Switzerland, April 29 (Reuters) - Stagflation is an increasingly plausible prospect in the United States and weak economic growth could last well into 2009, if not longer, the head of the Bank for International Settlements says.

Driven by a painful mix of layoffs and rising food and fuel prices, the number of Americans receiving food stamps is projected to reach 28 million in the coming year, the highest level since the aid program began in the 1960s.

wo worrisome trends for the U.S. economy - falling home prices and the rising cost of everything else - picked up speed in data reported Tuesday, putting policy makers in an increasingly tough position.

The US economy came to a virtual standstill in the final three months of 2007 as the deepest slump in the real estate market for a quarter of a century acted as a brake on expansion, according to data released in Washington today.

The world economy is facing the risk of both recession and faster inflation. Global growth this quarter and next may be the slowest in four years, while inflation might be the fastest in a decade, say economists at JPMorgan Chase & Co.

There is rising concern that the US economy will slip into recession next year dragging many economies - including Britain - down with it as the global credit crisis worsens. The Washington-based International Monetary Fund has warned of a 'perfect storm' caused by surging oil prices and the turbulence on financial markets.