Outlook for 1998

• • Sharp slowdown to 1.5 per cent growth in the first half; a one in four chance of a recession

• • Inflation to fall to 2.4 per cent by end-year despite average earnings growth of almost 5 per cent

• • Unemployment rate to fall below 5 per cent

• • Pound to fall to 2.80DM by end-year

• • Interest rates to peak at 7.5 per cent this spring coming down to 7.25 per cent this autumn

• • House prices to rise by 9 per cent.

• • Fiscal position improving but no case for policy loosening

Outlook till end 2000

• • Interest rates to fall to 5.25 per cent

• • Pound to fall to 2.60DM