The Bank of England today sounded a stark warning over the threat to UK growth of a "moribund" eurozone economy as it trimmed its growth forecast for the UK and predicted a 1% fall in inflation over the next six months.
Governor Mark Carney said: "A spectre is haunting Europe - the spectre of economic stagnation, with growth disappointing again and confidence falling back."
He said it was more likely than not that he would have to write to the Chancellor in the next six months to explain why inflation had fallen below 1%.
The Bank cut its UK gross domestic product (GDP) forecast for next year from 3% to 2.9%, although it still expects 3.5% growth for this year.
However, it predicts an end to the six-year squeeze on living standards, with real terms wage growth rising from around zero currently to reach about 2% by the end of next year. Pay has been lagging behind inflation since 2008.
Wages are rising faster than inflation for the first time since 2009 - but has it come late to influence next May's general election?
Investors in the markets have already made their bets: traders reckon the wage data brings a possible rise in interest rates sooner.