ECB president says economic recovery will accelerate

The world has embarked on an economic recovery that should accelerate over the coming months, leading central bankers said yesterday.

In an upbeat statement after a meeting of the Group of 10 countries (G10), Jean-Claude Trichet, the new president of the European Central Bank, said they were more convinced by the turnaround than two months ago.

"We have ... confidence at the global level that growth is picking up and recovery is gaining momentum," Mr Trichet said after the meeting in Bangkok. "And we are reasonably confident that this recovery ... would continue." He said the latest three months had been the pivotal quarter with growth accelerating in the strongest economies and finally taking root in the weaker ones.

"It would be quite likely that next year would be better than the present year and in some parts of the world even the following year, 2005, will be even better than 2004," he said.

The comments came in the wake of news that the American economy created an unexpectedly large number of jobs in October. Last week also saw the UK and Australia raise interest rates.

Last month the United States reported annualised growth of 7.2 per cent in the third quarter, the strongest rate in almost 20 years.

Despite the upbeat outlook, Mr Trichet played down hopes of a return to boom conditions. "There is no time for complacency," he said.

He said the G10 was still worried about a lack of progress in improving labour productivity, the level of consumer indebtedness and declining savings rates in others.

Central banks in the UK and Australia have voiced concern about rapidly rising property prices and debt levels, and how a property crash would hurt the economy.

Household debt has hit record levels in the UK and figures released on Friday showed the number of Britons going bankrupt has hit its highest level in more than a decade.

The G10 actually numbers 11 major industrialised countries: Belgium, Canada, France, Germany, Italy, Japan, Netherlands, Switzerland, Sweden, the UK and the US.