Growth has slowed since the summer of 2000, falling from significantly above to just below potential, but held up better than in the other major OECD economies. A series of domestic shocks, including the most severe foot-and-mouth disease crisis ever to hit the country, bad weather conditions and rail disruptions, do not appear to have had much adverse effect on overall economic activity, and the slowdown has mostly stemmed from global factors, notably the unwinding high-tech bubble and faltering overseas demand. This has been reflected in a decline in total fixed capital formation in the first half of 2001, notwithstanding a pick-up in government investment and resilient residential investment. The weakening of activity since late 2000 will be reinforced by the economic consequences of the 11 September terrorist attacks in the United States...