An economy based on ever increasing numbers of lawyers, bankers, accountants and journalists may sound like a horrible idea but it has worked well for Britain. Now, however, with the credit squeeze giving rise to fears of a global downturn led by the financial sector, it looks precarious. The very industries that have made the UK economy strong in the past few years – housing, finance and the public sector – also make it look vulnerable.

The first vulnerability is the one that gets the most publicity: housing. In a world full of house price inflation, Britain’s boom has been extreme: an orgy of landlords, estate agents and desperate first-time buyers. A crash would cause pain for those who build houses, sell houses, and lend money against the security of houses. Tenants would profit from cheaper houses even as the owners of buy-to-let portfolios lose, but damage to the financial system would probably cause a hit to consumption.