We suspect economic activity over much of 2006 will be held back by sluggish consumer spending and that the Bank of England's growth forecast will prove to be too optimistic.

If this is confirmed, it will reinforce our suspicion that the December performance was inflated by many consumers opening their wallets to treat their families and themselves at Christmas having held back their spending over much of 2005.

The February CBI survey reinforces our belief that consumer spending will be unable to sustain the relatively strong performance seen in the fourth quarter of 2005.

The MPC still has to see conclusive sustained evidence that 2006 pay settlements are remaining contained.

The data were firmer overall than expected,

The latest data - including the improvement in manufacturing activity and current strength of the housing market - has increased the odds that the eventual next move in interest rates will be up.