In times of panic, grown-ups keep their nerve. In a financial crisis, central banks must be the grown-ups. This week, however, the board of the US Federal Reserve seemed to panic by implementing an extraordinary 0.75 percentage point cut in its interest rates prior to its next scheduled meeting. The move was apparently in response to a falling (though still more than fully valued) stock market.

So should the Bank of England follow suit? The answer is: no. Another quarter of a percentage point cut now makes good sense. Dramatic slashing of interest rates does not.