Banks have featured heavily in this latest sag in equity markets. But the wobbles at Bradford & Bingley, HBOS and Barclays have diverted attention from what is really going on. Since the middle of May – roughly marking the top of the last rally – the FTSE 100 index has been hit hardest by a collapse in cyclical stocks. Investors have not just given up on the UK. It seems that belief in the resilience of the global economy is draining away as well.

Over the past two months the transportation, retail, property and media sectors have all fallen further than bank stocks. If some now think the economy is following the US into oblivion, the very institutions charged with trying to avoid this fate have hardly reassured. Last week, speeches from the chancellor of the exchequer and the governor of the Bank of England only just stopped short of telling people to pack their bags and move to France.