The preliminary figures for GDP in the first quarter of the year show a small increase. If oil and gas production are excluded the rise was about 1/2 per cent, following four quarters in which there was virtually no change at all. This confirms other indications of an incipient recovery, such as the rise in production and retail sales, increases in the volume of both exports and imports, more activity in the housing market and a surprising fall in unemployment. Surveys of business confidence also show a marked improvement. An upturn in economic activity would be a natural consequence of the fall in the exchange rate when sterling left the ERM and of the subsequent expansionary policy measures—as we have been predicting since last September.