Double-dip? A double-whammy certainly could be on its way

However, critics said governor Mervyn King and his troops on the monetary policy committee were still being unduly optimistic, as that forecast is still above the 2.3 per cent growth forecast for 2011 by the Office for Budget Responsibility.

Some market pessimism also took hold following the Federal Reserve's decision on Tuesday to keep its quantitative easing programme in place rather than run it down.

This was clearly an acknowledgement by the Fed that the American economy remains frail with high unemployment and a housing market treading water.

US weakness is not good news for Britain. The biggest danger is that we are caught in a pincer movement of slack demand from America and other countries for our exports just as the UK economic fallout from the government's public sector cutbacks really bites in 2011.

It suggests strongly that UK and US interest rates could stay low for a very good while yet, and that a further bout of the BoE pumping money into the economy by buying up bank bonds might not be that distant.

Recent UK surveys have shown slowing retail sales, failling house prices and consumer confidence at its lowest for more than a year.

And this is all since the June emergency Budget, and well before the details of the feared government spending review are unveiled in October.

The bears ask: if this is the bleak situation now what will it be like if global demand - even the Chinese ace in the hole - fades and hits any sort of export-led British recovery as the austerity measures kick in?

Damon Runyon, the raffish American writer around the time of the Great Depression, said: "The race is not always to the swift, nor victory to the strong. But that's sure as hell the way to bet."

I suppose the growing confluence of negative factors does not automatically mean King's suggestion yesterday that Britain's economic recovery will be "choppy" is correct. But it is looking the right way to bet.