This morning\'s disappointing revision in Q4 GDP lower makes it all the more important that the Q1 numbers come in showing some semblance of a recovery in the growth picture.

It would certainly need Q1 growth of at least 0.4% to keep the economy moving higher on an annualised basis, after the annual figure for Q4 dropped from 0.7% to 0.5%.

There was some evidence of a silver lining as business investment came in slightly higher than expected, but was still negative for the quarter but managed to recover into positive territory on the annual measure.

The pound has slipped back as result of this lower revision as markets weigh up the likelihood of further QE in the coming months.

The downward revision was largely driven by transport, business services and the finance sector, and no doubt validating the Bank of England\'s recent decision to embark on further easing in October and February this year.

Given the reliance of the UK economy on the consumer it remains doubtful that any growth in Q1 will be sustained into Q2 if recent UK retail sales data is any guide.
When averaged over the last four months sales growth remains fairly flat and this remains a concern despite all the attempts by the Bank of England to keep monetary policy fairly loose.

There remains very little evidence that easing measures are having the effect policymakers would like them too with bank lending remaining lacklustre while inflation stays sticky.
While Q1 may well show some growth policymakers are now getting there excuses in early by warning that the extra bank holiday in Q2 for the Queen\'s Diamond Jubilee could well see growth fall back.

The reality is given high consumer debt levels UK growth is likely to remain unevenly low for some time to come irrespective of the amount of QE and that until this deleveraging takes place it won\'t matter how much QE the Bank does.

The major downside to further QE will be persistently sticky inflation caused by a weaker pound and below inflation pay rises that eat into monthly incomes.

Key levels on the pound against the US dollar remain at 1.6000 on the topside and 1.5820 on the downside.