"With firm global growth and strong commodity prices, we expect inflationto resist returning to the low levels that policymakers had grownaccustomed to at the start of the current economic cycle," said LarryKantor, Head of Research at Barclays Capital. "We are recommending thatinvestors buy inflation protection in specific areas of the market thatstill offer value."

Major Themes of Barclays Capital's Economic and Financial Market Outlookinclude:

--  Global inflation risk is growing, even as the global policy response    picks up steam--  The extraordinary rise in commodity prices is not a flash in the pan,    and will have more impact on the global economy than many are anticipating--  Emerging markets, particularly in Asia, are facing the worst of the    inflation surge--  Tighter liquidity and more expensive credit will linger and exert a    drag on spending in the US and Europe for some time    

This research publication provides an economic assessment of all the majoreconomies and spells out the likely implications for global financialmarkets, including fixed income, foreign exchange, commodities, credit andemerging markets. This quarter's publication also explores how marketparticipants can navigate the markets in a rapidly changing economic andpolitical landscape.

About Barclays Capital

Barclays Capital is the investment banking division of Barclays Bank PLCwhich has an AA long-term credit rating and a balance sheet of over £1.2trillion (US$2.4 trillion*). With a distinctive business model, BarclaysCapital provides large corporate, government and institutional clients withsolutions to their financing and risk management needs. Barclays Capitalhas offices in 29 countries, employs over 16,200 people and has the globalreach and distribution power to meet the needs of issuers and investorsworldwide.

For further information about Barclays Capital, please visit our websitewww.barclayscapital.com.

*US$ figure was derived using the US$/£ exchange rate at 12.31.07 ofUS$2.00/£1