Over the past year inflation has fallen sharply, while volatile headline GDP data have masked an underlying picture of stagnant output. Our economy has faced an increasingly difficult external environment as the euro area has been engulfed by a crisis whose severity has become progressively more obvious. As a result, a black cloud of uncertainty has weighed on confidence, household spending, bank funding costs and business investment. That has been reflected in slower than expected output growth at home, and has prompted further easing in monetary policy from its already exceptionally accommodative stance. With the ... (full story)