The 4.0% m/m decline in durable goods orders in January, which more than reversed a 3.2% m/m gain in December, suggests that the expiry at the end of last year of the accelerated tax allowances for capital depreciation may have been a bigger factor than we previously thought. It now looks like any gain in business investment in equipment and software in the first quarter will be pretty modest, supporting our view that overall GDP growth will be a modest 1% to 2% annualised.
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