There are now widespread fears that the slowdown in the rate of growth of the UK economy might worsen and turn into another recession, Those holding this view can point to a variety of evidence to support their claim. In particular, retail sales in September were 0.4 per cent lower then a year earlier, house prices were 1.8 per cent lower than a year earlier, manufacturing output, which had grown by over 4 per cent in 1994, was only 0.6 per cent higher in September than it had been a year earlier. In addition, they can emphasise that stockbuilding cannot be expected to make the same positive contribution to output growth that it has made over the past year and is likely to make a negative contribution when excessive stocks are run down. They can also argue that any reduction in public spending relative to existing plans, to make way for reductions in taxation, will tend to reduce aggregate demand since cuts in spending have a larger effect on demand than equivalent cuts in taxation because the latter affect saving as well as spending.