London - US Treasury Secretary Henry Paulson warned Thursday that soaring oil prices were likely to prolong the world economic slowdown while there was a "very strong possibility" that the US economy would be growing by the end of the year.

Speaking at a news conference in London, where he had talks with Britain's Chancellor of the Exchequer, Alistair Darling, Paulson said the turmoil in the global financial markets and the "correction" in the US housing market would continue for some time.

"I think that the oil prices are a strong head wind and at this level ... they have got a high risk that they are going to prolong the slowdown," said Paulson.

However, he believed the outlook for the US economy would improve towards the end of the year.

"We have strong long-term economic fundamentals in the US. I think there is a very strong possibility that we will be growing at the end of the year - we will have stronger growth at the end of the year than we have right now."

Darling said that he did not expect the British economy to go into recession despite the slowdown.

"I believe that our economy will continue to grow," said the Chancellor. "The rate of growth will be slower."

He repeated the view that Britain sees the current financial turbulence as an international problem and believes Britain it is better placed than in the past to weather the storm. (dpa)