Without wishing to detract from Sir Digby Jones's well-judged campaign for an interest rate cut tomorrow, one must wonder whether he is over-egging the dreadfulness of the CBI's shopping survey for July.

The striking thing about these findings is that the terrorist bombs on July 7 seem to have made little or no difference.

They all went off in London and it looks as if people who didn't feel like going into London afterwards went shopping elsewhere.

That is reassuring, though no consolation for London shopkeepers. It suggests that the bombs failed to spread any mood of pervading unease where people decided that money they had intended to spend before the bombs was best left unspent afterwards.

This may no longer be so. The CBI pointed out that the unsuccessful, but still unsettling, second attack on July 21 came after it had collected the data for the July survey.

A sense that we are in for a long campaign of sporadic terrorism would have economic consequences - not only in the shops.

So far there is no sign of that. The stock market creeps steadily higher, driven, it would seem, by the prospect of falling interest rates and fuelled by hefty quantities of cash from companies returning capital to their shareholders.

The pound has been steadier, too, this week. That does not help exporters or anyone trying to compete with imports from low-currency countries. It does confirm the absence of any lapse of confidence in Britain on the currency markets.

They way things are, that is as well.

None of this means that the economy is out of trouble.

Manufacturing is in at least a technical recession after two successive quarters of falling output.

Lack of activity in the housing market is lying like a dead hand over all the retail trade that relies on buying by people moving house - and their buying power. The lack of the "feel rich" factor generated by zooming house prices until this time last year is only half the story.

The absence of hard cash no longer being spent by people putting their homes on the market and setting up in a new one is holding back the growth of the entire economy.

So is this summer's socially welcome trend to borrow more warily, indeed to pay off credit card debt. The consequences would have been worse if the credit boom had gone on booming much longer. But its demise now means less cash in the till.

That is at a time when Gordon Brown's overblown public spending spree has gone as far as it is going. It can no longer take up the slack.

On the other side of the equation, the slower-growing economy puts his tax revenues at risk. The prospect of higher taxes is hardening into a near-certainty. That may not be affecting the way people handle their money yet. But it may.

The better news is jobs are still seen as available and relatively safe. So long as they remain so - and interest rates are heading down, not up - house prices should hold fairly steady.

Without a wave of forced selling they won't fall off the cliff.