I fear that what Mervyn King, governor of the Bank of England, has called the NICE – “non-inflationary consistently expansionary” – decade has spoilt the British. Now that times are tougher, many are returning to bad old habits: politicians are making futile pleas for private sector pay restraint; some pundits are calling for the recasting of inflation targets; and interventionists even demand huge subsidies for mortgage lending.

Everybody should calm down. What is looming ahead will be tougher than the continuous expansion the UK has been used to over the past 16 years. But this is not the end of the world.