Prospects of further US interest rate cuts were heightened this week following comments by Ben Bernanke, the Fed chairman who in his testimony to Congress warned of the downside risks to US growth and said the central bank stood ready to act in a “timely manner” to address them.

Japanese growth was surprising strong in the final quarter of 2007 growing by 0.9%, but prices, as measured by the GDP deflator continue to fall. As expected the Bank of Japan left interest rates on hold at 0.5%.

GDP in the Eurozone expanded by 0.4% in the fourth quarter, after 0.8% in the previous three months, according to Eurostat, the European Union’s statistical office. Italy’s economy is thought to have contracted.

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