The analysis of the prospects for the UK economy over the next two years is inevitably dominated by the uncertainty about the results of the negotiations on a Stage III pay policy to run from July. The range of possible outcomes is, at the time of writing (mid-May), very wide indeed. At the lower end of the range, the Government has been expressing hopes for the negotiation of an agreement which would give a rise in average earnings at a rate of not more than 10 per cent per annum. It is very much harder to put a figure on the rate of increase which would occur if an agreement were not reached or—as seems more plausible—if an agreement were reached but were progressively to break down during the autumn and winter.