Global economic activity clearly rebounded in the first half of this year. The pick-up from the weakness in the latter half of 2001 was especially marked in North America and Asia, with GDP rising by around 1½ per cent in the first quarter in the United States, Canada and Japan. Activity in Europe was more muted, with GDP rising by 0.3 per cent in the Euro Area and 0.1 per cent in the UK. Although recent monthly data have been mixed, and a number of temporary factors that boosted growth at the turn of the year may have run their course, it appears on balance that there was a further broadly based pick-up in activity in the second quarter of the year. Outside the major industrial economies improving conditions in the IT sector have provided a significant stimulus to some emerging market economies, especially in Asia, but several economies in Latin America have seen a marked deterioration in domestic economic and financial conditions. All told, we expect world GDP growth (measured at purchasing power parities) to be around 2¾ per cent this year, little changed from our previous forecasts. This would be a modest improvement on the growth of 2½ per cent last year, but well below the trend increase of 3½ per cent per annum experienced over the past 30 years.