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.
Overall, consumer demand looked pretty robust in Q4 -- aided by ongoing price discounting -- but significant doubts persist in terms of the extent to which demand will hold up in 2006.
To some extent jobs created in the public sector will compensate for job cuts in the private sector.
When you've got inflation rising above the bank's target it reinforces the view that we don't need more rate cuts this year.
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.
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.
Manufacturing is showing a few signs of improvement. It isn't acting as a drag on overall growth, making it easier for the Bank to leave rates on hold for now.
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.
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.
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.
