Rates of economic growth in the three main economies are starting to converge. The move out of recession in North America, and a slowdown in Germany and Japan, have reduced the marked divergence in growth rates that was evident at the beginning of the year. An encouraging feature of these developments is the affirmation that policy is directed to achieving sustainable growth and low inflation. In Germany there are signs of a rise in inflation, but any increase is likely to be modest, as the authorities have reiterated their anti-inflationary commitment. In the United Kingdom inflation has continued to fall, although there is uncertainty about the timing and strength of the early phase of recovery.