The US economy should expand by around 3pc in 2003, according to Eddie George, chairman of the G10 and governor of the Bank of England. In a statement today, George said that the economic picture had not changed much in the past few months despite the continuing uncertainty caused by the threat of war in Iraq. "Recent US indicators have been mixed, with the current quarter being sluggish on the business side and inventories at a very low level," he said. "This suggests a rebuilding of stock once uncertainties are removed, he said, adding that business investments are already picking up in the US.
Turning to the eurozone, he said, "The anticipated second-half recovery will be delayed and only a very modest but positive growth is expected for 2003. The pick-up will still come but it will be more protracted." George's comments contrast sharply with statements last month from a group of top US economists in the National Association of Business Economics who warned that US growth is being hampered by rising geopolitical tensions. //www.fxcentre.com