I'm reading the Harry Potter series to my 5 year old at a somwhat slow pace; slow, as we typically only have time for half a chapter per night and he seems to ask questions every odd sentence! I think he's managing to follow the story though - he just requires a bit of processing time and the odd query to keep it in order. You can never go wrong with Roald Dahl of course - my son loved the BFG and Fantastic Mr. Fox.
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