Barclays Capital, the investment banking division of Barclays Bank PLC, today said in its latest flagship quarterly research publication, Global Outlook: Green Shoots Blossom, that economic growth is likely to surprise to the upside in the second half of the year. While rapid growth is already underway in Asia, investors have not yet priced in a rebound in the US and Europe, likely due to lingering fears over household and business balance sheets. While these factors could well constrain medium-term growth, Barclays Capital expects positive cyclical developments to continue to dominate market moves over the next few months.

“The recovery trade has more room to run,” said Larry Kantor, Head of Research at Barclays Capital. “Despite market expectations that the developed countries outside Asia will do no more than stabilize over the next six months, we are forecasting significant rebounds in activity in these countries as production recovers from recent sharp pullbacks. We are therefore recommending continued exposure, on a selective basis, to risky assets.”

Major themes of Barclays Capital’s third quarter Global Outlook include:
•  A cyclical dynamic will play out across all the recession-hit economies, with global industrial production growth peaking in the second half of 2009.
•  In the US, new auto purchase incentives will increase sharpness of industrial bounce.
•  Europe will see an earlier, but ultimately weaker, production rebound than US.
•  By mid-2010, growth will have eased back and secular considerations should dominate economic performance.
•  Recommending investors maintain selective risk exposures, particularly to assets that would benefit from better-than-expected growth in the major developed economies.
•  There is still value in equities and corporate credit, as well as particular sectors of emerging markets and commodities.

About The Barclays Capital Global Outlook
The Global Outlook research report, published quarterly, provides an assessment of all major economies and outlines the likely implications for global financial markets, including commodities, credit, economics, emerging markets, equities, fixed income and foreign exchange.

About Barclays Capital
Barclays Capital is the investment banking division of Barclays Bank PLC. With a distinctive business model, Barclays Capital provides large corporate, government and institutional clients with a full spectrum of solutions to their strategic advisory, financing and risk management needs. Barclays Capital has offices around the world, employs 20,000 people and has the global reach, advisory services and distribution power to meet the needs of issuers and investors worldwide.
For further information about Barclays Capital, please visit our website www.barclayscapital.com.