Growth figures signal 'we have entered a new normal'

It seems likely that we have entered a 'new normal' period where growth will be relatively subdued by historic standards for some years to come as the banking system remains impaired and global commodity prices remain relatively high and volatile.

On the brighter side, inflation looks set to fall back to target over the next year, which should ease the squeeze on consumer finances. We would therefore expect the MPC to sit on its hands until at least November before considering any further changes in monetary policy.