Despite unexpectedly good Christmas sales, there has been a marked slowdown in UK growth in the year just ended - to 1¾ per cent according to Treasury estimates, compared with a trend of 2½ per cent or more. This is far from being a disaster, but it does amount to what American economists call a growth recession.

Official forecasters treat this as a temporary relapse, largely explained by world conditions such as the rise in oil prices. They expect a recovery of output growth this year to between 2 and 2½ per cent, or almost up to trend, and in the following two years a further rise to about 3 per cent or above.