Fed Reserve may cut interest rates for seventh time this year

The US Federal Reserve may cut interest rates for the seventh time this year when it meets next week.

Earlier this month the Federal Reserve warned that the US economy was still slowing, which suggests it may cut rates again when it meets on Tuesday.

This is despite a recent unexpected fall in US inflation and unemployment.

Earlier this month the Fed warned that problems in manufacturing were spreading to other areas of the US economy.

The Fed revealed that economic growth eased to just 0.7% in the April to June quarter, the worst performance for eight years.

The Fed's survey, known as the "beige book", was based on reports from its 12 regional branches.

However, figures released last week revealed that prices paid by US shoppers recorded their biggest fall in 15 years last month.

US consumer prices eased 0.3% in July, while the latest US weekly jobless claims also fell by 8,000 to 380,000.

In an effort to stave off recession, the Federal Reserve has slashed interest rates six times this year, totalling 2.75%, the most aggressive credit-easing campaign in nearly 20 years.

The latest statistics signal low inflation, which some analysts believe will make a further cut more likely.