The world economy is starting to pick up speed again: by 2003, it will be growing by 3.7 per cent, with world trade expanding by 8.5 per cent a year.

This will prompt rises in interest rates in North America and Europe.

The US will grow by 2.4 per cent this year, double the rate of last year, rising to 3.5 per cent in 2003.

Recovery in the euro area will be gradual, with GDP growth rising from 1.4 per cent in 2002 to 2.5 per cent in 2003.

The Japanese economy will shrink by 1.2 per cent in 2002, and recovery in 2003 will be relatively modest, with GDP growth of 1.3 per cent.