Wall Street was fairly lacklustre on Wednesday as the Organisation for Economic Co-operation and Development (OECD) raised its world economic forecast for this year as inflation eases and central banks cut interest rates.

The Paris-based organisation said global gross domestic product (GDP) would expand by 3.2%, compared to 3.1% in its previous estimation.

It raised the outlook for the UK, as well as for Brazil, Russia, Saudi Arabia and Spain.

Traders were also subdued amid caution over the outlook for interest rate cuts, while US mortgage applications rose again last week, continuing the rebound seen in recent weeks.

Applications jumped by 11% in the week to 20 September, following a 14.2% increase in the previous week, the Mortgage Bankers Association said.

It comes as the Federal Reserve lowered interest rates for the first twice in four years last week.

Meanwhile the FTSE 100 ( ^FTSE ) and European stocks headed into the red as Beijing's announcement of a flurry of measures aimed at reviving the housing market after a prolonged downturn began to wear off.

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