The markets expect the Bank to start cutting rates from the autumn onwards I suspect we'll know rather earlier than that what's needed. The Bank still suspects we are going through a temporary hiatus in consumption. It may still be right.Tunnel may join 21st centuryWell there's a thing. The general trend in earnings is as a consequence a little bit higher than the level the Bank thinks will trigger price pressures. The only area of economic activity still indisputably growing is the public sector, which given that it has to be paid for by the private sector hardly gives reason for encouragement.On the other hand, inflation is still rising, and despite reports of mass lay-offs on the high street, the labour market remains as tight as tight can be. There's no reason to believe that has not continued into the second quarter.Still, things are plainly bad enough. Consumption is two-thirds of GDP, and if consumption is not growing by much, the economy as a whole will likely be stagnating too.

There's little sign of the corporate sector taking up the baton of growth. To the contrary, some companies are already in retrenchment mode once more. Retail sales were down on a like-for-like basis last month, but taking account of extra space they were higher. Nor does what's happening on the high street give a reliable guide to consumption as a whole In the first quarter consumption was still rising. According to the British Retail Consortium, high street sales for the second month in succession in May on a like-for-like basis. New car sales were down 3.4 per cent on the same month last year.

With the economy apparently sliding, has not the time arrived for a confidence boosting cut? Leave it much later, and the economy may already be in a self-perpetuating downward spiral It's easy for the retail sector to cut jobs. Many on the high street are already doing so, which means even less money for consumption.For the time being, however, the Bank's Monetary Policy Committee is right to ignore the siren calls of the retailers. Despite this, hardly anyone expects there yet to be an interest rate cut quite yet. It's interest rate decision time again this week, and the "downside risk" to which Mervyn King, Governor of the Bank of England, referred at the time of the last Inflation Report seems, if anything, to have worsened markedly. He said Hanover had no intention of building its stake beyond 15 per centand said shareholders could expect to see results within the next 12 months.Shares in Elementis rose more than 4 per cent to close at 49p yesterday, giving the company a market value of £211m.. It intends to use its strength in this area to boost Quorn's availability.The deal is also the most expensive that Premier has announced. The price is 11 times Quorn's £15.6m of earnings before interest, tax, depreciation and amortisation.