Global demand growth has slowed, with activity in the euro area being especially weak. In the United Kingdom, output has been broadly flat over the past two years. Although output is estimated to have fallen for three consecutive quarters, the scale of that contraction was amplified by a number of erratic factors and so probably exaggerates the weakness of underlying activity. Even so, underlying demand growth is likely to remain muted in the near term. But a gentle pickup in the growth of households’ real incomes, combined with the stimulus from the asset purchase programme and the Funding for Lending Scheme should ... (full story)