Economic activity picks up further

Judging by the latest business surveys, activity in advanced economies has strengthened further. The global manufacturing PMI is now consistent on past form with world GDP growth of as much as 4%. Activity has picked up most in the US and UK, and although it has slowed in Japan it remains strong there by historical standards. However, the expansion in the euro-zone is feeble, with output probably still contracting in several countries, including Italy. Not surprisingly, inflation is still well below the target in most advanced economies and, if anything, looks likely to fall further.