WORLD OUTLOOK

Our view of the world economy in the short-term has become more downbeat. However, the slowdown which emerged last year is still expected to prove short-lived and we expect economic prospects to improve over the course of 1996. Interest rates have fallen and the ability of the monetary authorities to relax policy against a background of low inflation provides a safeguard against a more severe slowdown. The world economy will also be supported this year by recovery in Japan and the continued buoyancy of the Asia/Pacific region.