The UK economy has now enjoyed four consecutive quarters of expansion. Indeed GDP growth reached 1.2 per cent in the second quarter of this year, the fastest rate of growth in over a decade. The National Institute's estimate of monthly GDP suggests that the economy continued to expand in the third quarter of this year, but at a more modest pace of 0.5 per cent (see figure 1). Such a slowdown should not have come as a surprise. Persistently strong growth is unlikely in an economy where household balance sheets are still undergoing repair, funding channels to business remain impaired and the public sector is embarking on a significant programme of fiscal consolidation. However, we continue to think the chances of negative output growth in 2011 are about one in five and hence a double dip recession is unlikely.