The Bank of England left interest rates on hold for a ninth month today as evidence builds that the British economy is slowing fast.
A fragile recovery in manufacturing seems to be over, and consumers who have powered the economy for the past few years appear to be running out of steam after five rate rises in 18 months, according to the latest figures.
"The news on the real economy, namely weaker consumer activity and the global soft patch in activity, has outweighed the committee's prior fears on inflation prospects," said Philip Shaw, chief economist at Investec.
Only a month ago many analysts had thought the central bank would raise borrowing costs by another quarter point this month to keep inflation down but news since then has been bleak.
Manufacturing output fell at its sharpest rate in nearly three years in March, suggesting first-quarter growth was even slower than the 0.6 per cent initially estimated.
Consumer spending remains weak, with the latest retail survey showing sales diving at their sharpest pace in 13 years in April, adding to fears that the risk of a sharp consumer slowdown is materialising.