LONDON (AFX) - The National Institute of Economic and Social Research said it has downgraded its 2001 GDP estimate for the UK to 2.1 pct from 2.4 pct previously. NIESR said in its latest quarterly economic forecast that its GDP estimate relies on the second half being more buoyant than the first half. It also highlighted considerable downside risks to this scenario. The downturn in overseas markets will cause manufacturing to contract by 1.1 pct this year, it added. The "malaise" of manufacturing means that productivity growth will disappoint in the short-term, increasing by 1.7 pct in 2001, below its long-run growth rate, NIESR said. NIESR said that the slowdown in economy will cause a turn in the labour market, pushing up unemployment and reducing wage pressures. This will help the government to keep inflation below the target level of 2.5 pct next year, it said. The Institute also called for a further cut in interest rates to protect the economy from the impact of the global slowdown.