Recovery still slowing

The recovery is still losing momentum, with the CIPS/Markit surveys indicating that growth may grind to a complete halt by the end of the year. (See Chart.) Admittedly, the economy now seems slightly better balanced than it looked before, with investment now estimated to have boosted, rather than weighed on, growth in Q2. But consumers only financed their spending by cutting their saving and the trade deficit widened. We still expect real GDP growth of just 1.5% in 2011.