After rapid growth in 1987 the pace of expansion in the UK economy is likely to slow down considerably during next year. Year on year we expect 4 per cent growth in 1987 to be followed by about 2½ per cent in 1988; through the year (fourth quarter on a year earlier) the deceleration is more marked, and 3½ per cent this year is followed by only 1½ per cent. We were already expecting a slowdown of this kind before the October fall in stock market prices, partly because of the appreciation in the sterling exchange rate earlier in the year and again in the past few months.