If consumer spending falls, the probability of the economy slipping back into recession is very high.

The raises in interest rates will reduce the willingness and ability of consumers to continue their pace of borrowing. This is both directly -- through the cost of debt -- and indirectly -- because it's likely to slow house price appreciation.

Year over year, the data shows, this will be the strongest holiday season since 1999. But because consumers have been spending since September, there's not much pent-up demand. Consumers have already spent up demand.

As the economy has slowed customers have become more concerned about price.

We live in an information and knowledge-based economy.

This reinforces the role of business investment and exports as underpinning the recovering economy. Looking ahead, the oil price presents a clear negative for the consumer and we're likely to see only a moderate pace of growth being sustained.