The UK economy [March 2004]

The US is driving world growth with very strong growth in the domestic economy. The dollar has depreciated significantly and this is boosting US growth. The decline of the dollar cannot continue indefinitely however and we are forecasting that this will reverse when US employment data picks up and remains relatively robust. This is likely to be towards the end of this year. China continues to provide a strong stimulus to world economic growth and Japanese economic performance is much stronger than expected. The Euro Area continues to be slow with very weak domestic demand. Germany and Italy are now out of recession and we do not expect the Euro Area to pick up until 2005