The acceleration in GDP growth to 2.8% annualised in the fourth quarter, from 1.8% in the third, suggests that the recovery is gathering momentum. However, the much bigger than expected positive contribution from inventories in the fourth quarter leaves us even more convinced that growth will slow again to a sub-2% rate in the first quarter of this year. More generally, we expect growth to average only 1.5% this year, with fiscal tightening and the continuing malaise in housing holding back domestic demand at the same time as the global slowdown hits exports.