Both the financial crisis and its consequences for the real economy, in the world and the UK, have become more disturbing over the past few weeks. Bradford & Bingley, another specialised mortgage bank, has disappeared. The crisis has spread into the eurozone, not least with the Irish government’s decision to guarantee the liabilities of its largest banks. Money markets also remain under great stress, with spreads between rates of interest on inter-bank lending and expected official rates at extraordinary levels.

Yet the US rescue package does look more likely to pass than on Tuesday. This raises a question: should the UK try to do something equally systematic? On balance, I believe, the answer is: no. But it does have to think through some big issues. I will focus on three: fiscal policy; policy towards the banks; and monetary policy.