A successful short, sharp war against Iraq would be better for the US economy than no war at all, according to a report from the UK's Institute of Directors (IOD).

In economic terms, a short war is better than no war, or no regime change, because of the removal of uncertainty IOD report

It set out a range of scenarios between the West and Iraq and looked at the effects each would have on the world's leading economy.

The study concluded that a prolonged Gulf War could send oil prices soaring to $80 a barrel, make the US stock market fall by 30% and the country's gross domestic product shrink by 2%.

But the IOD said this scenario was unlikely.

It thought a short, successful war was most probable and said that would result in oil prices quickly falling back by about a third to $20 a barrel and the US economy growing by 2.9% this year.

Falling oil prices

"In economic terms, a short war is better than no war, or no regime change, because of the removal of uncertainty," the report said.

Once you look coldly at war we're in the hands of the devil John Edmonds, GMB general secretary

Its author, IOD chief economist Graeme Leach, told BBC Radio 4's Today programme that he was not making a case for war.

But he said: "The economic conclusion is that economic growth will be higher this year in the United States if there is a short war.

He said that was because oil prices would fall more quickly and it would be easier for President Bush to get Congressional approval for his recently announced package of tax cuts.

Lower oil prices would also give the US Federal Reserve a further opportunity to cut interest rates.

'On the road to perdition'

But John Edmonds, general secretary of the GMB, was appalled by the report.

"I understand what the IOD is trying to do but there's not much humanity in this is there?

"Once you look coldly at war we're in the hands of the devil," he told the Today programme.

Mr Edmonds argued that the best thing for the economy would be for demobilisation to take place.

"Then the world would heave a sigh of relief," he said.

"Once people start saying: 'Oh, economically it would be much better if we had a quick war,' we are on the road to perdition."