The list of economic risks the UK confronts is long and becoming lengthier. It does so, moreover, under a weak government. But this government is the only government the country has. It has to act. The question is where and how.

For the UK, home to the world’s leading international financial centre, the global financial crisis is inevitably also a domestic one. But the combination of high commodity prices and a falling currency, which have pushed inflation far above target and forced the Bank of England to keep interest rates as high as 5 per cent, is also battering the economy.