* OECD says world economy shrinking faster than expected
* World Bank announces $50 billion trade program
* Stocks look to record best month in 6 years in March
* Dow rises 1.4 percent, European stocks jump 3.4 percent
By Brian Moss and Lesley Wroughton
NEW YORK/LONDON, March 31 (Reuters) - World leaders traveling to London for this week's G20 crisis summit got a stark reminder on Tuesday about the size of the economic storm they face.
The Organization for Economic Co-operation and Development forecast the world economy will shrink far faster than originally expected and send unemployment soaring, underscoring the need for extra steps to battle the crisis.
World Bank President Robert Zoellick meanwhile announced a $50 billion program to counter the decline in world trade.
The 30-nation OECD, releasing its outlook as Japan said it was readying a third economic stimulus package, predicted that member economies would shrink 4.3 percent this year. That compares with a November forecast of a 0.4 percent contraction.
"The world economy is in the midst of its deepest and most synchronized recession in our lifetime caused by a global financial crisis and deepened by a collapse in world trade," the Paris-based OECD said.
"We anticipate that the ongoing contraction in economic activity will worsen this year before a policy-induced recovery gradually builds momentum through 2010."
Both Japan and Germany announced big rises in unemployment, underscoring the human cost of the crisis that leaders of the world's richest nations and biggest emerging economies must tackle when they meet in London on Thursday.
And U.S. economic reports of near-record low consumer confidence, plunging home prices and regional business slowdowns added to the tally.
STOCKS RISE
While indicators pointed to a worsening global economy, stock markets looked set to achieve their best monthly performance in more than six years in March.
The Dow Jones industrial average rose 1.6 percent on Tuesday while Europe's FTSEurofirst index was 3.4 percent higher on optimism about the banking sector. Japan's Nikkei stock average earlier dropped 1.5 percent on the final day of the nation's financial year.
But the MSCI World index, up 1.6 percent, was still down more than 12 percent this quarter after losing 22.7 percent in the October-December period last year.
U.S. President Barack Obama was due to arrive in London for the talks on Tuesday evening, carrying a hefty agenda of how he sees the world dealing the crisis.
This will be the first major overseas trip of Obama's presidency, during which he will hold bilateral talks with the leaders of China and Russia before going on to a NATO summit and visiting the Czech Republic and Turkey.
But the economy he left behind was suffering. Prices of U.S. single-family homes in January plunged a record 19 percent from a year earlier, according to a Standard & Poor's Case-Shiller report.
U.S. consumer confidence remained near a record low hit in February, said business research group The Conference Board. Midwest business activity shrank in March at the most severe rate since 1980, according to the Institute for Supply Management.
There were signs of renewed vigor from U.S. automakers. General Motors Corp, which a day earlier saw its turnaround plan rejected by the U.S. government and its CEO ousted, announced a program to cover payments if customers lose their jobs. Ford Motor Co offered a similar plan.
Chrysler LLC, meanwhile, was being visited by Fiat chief Sergio Marchionne, who flew to Detroit on Monday after Obama gave the company a 30-day deadline to craft a deal with the Italian automaker.
JAPAN STIMULUS
In Japan, Prime Minister Taro Aso pledged to submit an extra budget to fund a new stimulus package to fight recession at home but was silent on how much the government would spend.
The planned package, which would be the third since the economic downturn, will likely aim to create 2 million jobs over three years.
Germany reported its biggest jump in unemployment in March since the economic crisis began, figures from the Federal Labor Office showed.
"The German labor market is increasingly feeling the pain of the country's worst recession in decades," economist Carsten Brzeski of ING Financial Market said after adjusted numbers for March took German unemployment to 8.1 percent.
Inflation for the 16 European countries in the euro zone, was down to a record low of 0.6 percent year-on-year in March, bolstering expectations of an ECB rate cut on Thursday.
Markets expect the European Central bank (ECB) to reduce rates by half a percentage point to 1.0 percent and perhaps announce measures to boost liquidity.
British Prime Minister Gordon Brown, the host of the G20 summit, said leaders would only succeed in tackling the economic and financial crisis if all nations committed to act together.
"Leaders meeting in London must supply the oxygen of confidence to today's global economy and give people in all of our countries renewed hope for the future," he said.
With big demonstrations planned against the G20 meeting in London and fears some could end in violence, Brown said in a television interview he understood public anger at the global recession but warned it should not be allowed to boil over. (Additional reporting by Yuzo Saeki in Tokyo, Stella Dawson and Dominic Lau in London; Writing by Malcolm Davidson; Editing by Keiron Henderson)