Are we heading for a recession?
Updated on 23 January 2008
Falling profits plus a gloomy outlook equals growing fears about recession.
Stock markets around the world have slumped for yet another day and banks, oil companies and technology firms are the biggest losers.
It means the Footsie's now lost around £228bn this year or 14 per cent of its value.
Yet experts say the Bank of England is unlikely to follow The Federal Reserve's decision yesterday to slash interest rates.
The minutes of last month's monetary policy committee meeting show members in broad agreement to keep them steady.
So is this a sign of optimism or are there are other problems ahead like inflation?
The turmoil blowing through the world's stock markets feels a million miles away from the factory floor of one EA Technology, based near Chester.
It is a power engineering company. They make power cables and the equipment to maintain them. In their words they help electricity companies keep the lights on.
The manufacturing sector's often born the brunt of economic woes but here business is booming.
They've opened an office in Shanghai and they're planning one in Abu Dhabi and they predict they'll effectively help electricity companies keep lights on.
The news of tumbling stock markets can't shake the optimism felt by this company.
So can the recession be avoided? The message from many companies is that things are going well.
The latest figures suggest so far that economic growth is slowing but not freezing up.
In the fourth quarter of 2006 total output in the UK expanded by one per cent. During 2007 the quarterly growth rate slipped back.
But today, official figures revealed growth at 0.6 per cent in the fourth quarter. So there is a slowdown but no recession yet.
The minutes, published today, of this month's monetary policy committee meeting appear to confirm that picture.
They decided 8:1 to keep interest rates on hold and the prospect of a dramatic emergency cut in interest rates as we've seen in the United States look limited.
Although The Bank of England talks about a significant risk of a downturn in the UK economy, it also talks of substantial upward pressure on inflation.
In a speech last night, the governor of the Bank of England warned about the impact of higher fuel and food prices on inflation which could see the government's inflation target breached.
