
It's The Bag by Wendy Wonnacott in the book No Sheep For You. If you decide to do this bag, a couple of notes. First off, you really want to use stitch markers to section off the knitting the way Grumperina suggests . Secondly, the knitting mirrors itself. The knit row sets up the colour pattern for the next ,purl, row. Do not screw up the knit row.
I have had to tink back half a row several times because I screwed it up. I really wish this was charted. It would have been so much easier. Charting it now, after I fought my way through it is pointless though. Ah well.
Ciao