Those whose economic experience has been confined to the decade or so of steady growth and low inflation in the UK and the eurozone might be surprised to find me saying that the “bold” 1.5 percentage point cut in official interest rates announced by the Bank of England is barely adequate and will probably need to be followed by further cuts soon. Official interest rates have in this period normally moved by a quarter percentage point at a time, with even half a point regarded as exceptional. But these are not normal times.

The big difference in diagnosis is between those who still think in terms of a conventional business cycle with output fluctuating in familiar snakelike fashion around a stable trend given by “supply side” factors, and those who believe that something more apocalyptic has happened. For this first group it is important to worry about the size of the current budget deficit, re-establishing fiscal guidelines in the medium term and the maintenance of an arm’s length relationship between governments and central banks. The obvious exponent of this view has been the European Central Bank, with its insistence that its economic task is just to maintain the stability of a consumer price index. Its limited half a percentage point cut in its base rate to 3.25 per cent yesterday shows how reluctant it is to abandon this point of view.