A slowdown in European manu- facturing growth yesterday highlighted the uncertain world economic outlook as finance ministers and central bankers from the Group of Seven industrialised nations gathered in Washington.

Purchasing managers' surveys showed euro-zone manufacturing expanding at its slowest rate for seven months and British manufacturing growth at its lowest for more than a year.

The US Institute for Supply Management said its index of national manufacturing activity also fell last month - to 58.5 from 59.0 in August - pointing to a slowdown. However, US manufacturing activity remained robust and growth was stronger than in other large economies.

The impact of high oil prices on economic growth was high on the agenda of last night's G7 meeting, and it will also overshadow this weekend's annual meetings of the International Monetary Fund and World Bank.

The IMF warned this week that high oil prices would be a drag on world economic growth in 2005 and that energy market volatility was the main risk to the outlook, but it still forecast strong growth this year and next.

"I would not say that oil prices could derail world economic growth," Mr Rodrigo Rato, the IMF's managing director, said in an interview.

China was invited to a special session with the G7 over dinner last night, the first time its representatives have attended the gathering. Few G7-watchers expected any significant announcements after the meeting, but China's attendance is seen as the first step towards eventual membership.

Before the G7 meeting, Mr John Snow, US Treasury secretary, and Mr Alan Greenspan, chairman of the Federal Reserve, met a Chinese delegation led by Mr Jin Renqing, finance minister.

The US Treasury said in a statement that the Chinese officials had reaffirmed China's commitment to further advance reform and to push ahead firmly and steadily to a market-based flexible exchange rate.

The Treasury has led the call for China to move to a more flexible currency regime.