...The pick-up in economic activity has been lacklustre this year, disappointing earlier expectations. Although one-off factors (such as supply-chain disruptions, April holidays and last December s snow) offer a partial explanation, it is clear that underlying recovery momentum has proved slacker than originally expected and leading indicators suggest even more challenging conditions lie ahead. Consequently, GDP growth this year is now only expected to be 1%, half the pace anticipated six months ago. Furthermore, prospects for 2012 also look bleaker than earlier in the year, with GDP now only seen increasing by 2%. Deteriorating external conditions and the diminished scope for fresh policy initiatives suggest downside risks dominate even this more pessimistic view of recovery prospects....
