The COST-731 Action is focused on uncertainty propagation in hydrometeorological forecasting chains. The goals and activities of the Action Working Group 1 can be subdivided by (1) describing and studying the impact of imperfect observations, mostly from radar, (2) exploiting radar data assimilation as a promising avenue for improved short-range precipitation forecasts and (3) high-resolution ensemble forecasting. Activities of Working Group 1 are presented along with their possible significance for hydrological applications. Copyright (C) 2010 Royal Meteorological Society and Crown Copyright