The world's top central bankers today agreed there were clear signs of an economic upturn in the US and Europe while inflation remained in check.
"As far as the major economies are concerned, there was a clear sense that not just the US, but also the euro zone is through the trough," Sir Eddie George, governor of the Bank of England, told journalists after chairing a regular gathering of central bankers from major economies at the Bank for International Settlements.
Sir Eddie said the group, which included Federal Reserve chairman Mr Alan Greenspan and European Central Bank (ECB) President Mr Wim Duisenberg, judged inflation was not a major concern.
In its monthly report for May, the ECB for the first time this year omitted a reference to 2002 inflation falling below its 2.0 per cent target, prompting speculation the bank may have given up hope of keeping price rises below that level.
Commenting on the United States, Sir Eddie said a pickup in investment spending was crucial to cement the upturn.
He said it was clear US productivity growth had fundamentally improved. "And that is tremendously important because it has implications for profitability and the whole performance of the US economy," he added.
But US Federal Reserve chairman Mr Greenspan warned it was hard to judge yet if productivity growth was really running at the high pace suggested by recent data.