This heightens the risk that we could get a rate cut in November. It's a concern that U.K. industry isn't able to do better and tap into global demand.

If the recent trends of muted wage inflation, deteriorating employment and industrial recession persist, we would expect the current downside monetary policy bias to translate into a cut in base rates. Our forecast is for one more quarter point reduction, in May.

The faltering global recovery means we would not be surprised to see a rate cut, but with the UK having held up well... we stick to our forecast for rates to remain on hold.

Evidence of stronger consumer demand over Christmas probably means the hawks can hold the line in February, but the risks for base rates remain skewed to the downside.

The big picture is essentially unaltered. It's a solid start to 2006 for the UK service sector.

It's not particularly substantial. Especially if you look at it from the point of view of the more than 450 billion pounds of government spending every year.

Compared with the slowdown at the start of the year, these numbers look a little healthier. In the short term, the numbers don't help the case for rate cuts.

Of the Group of Seven economies the UK is in the best shape but there is a risk to the downside, ... There's not much data post September 11. A quarter point cut as a precautionary measure will not be too much of a risk.

To some extent jobs created in the public sector will compensate for job cuts in the private sector.

The deficits are bigger than expected but the underlying picture remains the same. The risk is that we will need tax rises in the medium term but there is no immediate pressure.