Dr. Alan Barrett:

I do not think we are. On capital expenditure, there can be reasons capital expenditure runs behind profile. Very often, this has to do with the lumpiness of projects. For example, things do not necessarily start when the might be expected to start. It is a very different profile of expenditure. You should really be judging the quantum of spend over three- to five-year periods. If there are significant shortfalls over such periods, then you would worry about it.

What we were really struck by was the extent to which the current allocations are strong and the fact that while we are doing a lot of expenditure, the natural inclination, given the investment needs, is to ramp up expenditure even further. For us, that was the critical difficulty or constraint. We would not necessarily seen the fact that we are running a little bit behind as a problem. It is better to be delaying projects as opposed to doing the sort of stimulatory injections that we are talking about and the effects that these might have. There is still the question about a situation where expenditure is running behind. In that context, you need to look all the more closely at the package of projects that you are doing in order to make sure you achieve all that you want and that the objectives are being maximised. Back to the earlier point, if you have done an analyses of a project and have a clear understanding and ranking of projects in the context of which ones are yielding the most positive returns, then you should be sequencing things in the sense that you do the things that are most important earlier and make sure that that is there.

The one additional point that we would make - I will ask Dr. McQuinn to talk about this in a minute - on investment in housing potentially having a counter effect on inflation is really important. We were very eager to make sure that was understood in the report. We said a great deal about that first-round effect of inflation in the construction sector increasing the costs of the delivery of new houses but having this different effect on the existing stock of houses. We also commented on the extent to which house prices are feeding in through the competitive challenges facing the economy more broadly. This was really important. Perhaps Dr. McQuinn might take a minute or two on that.