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We simply don’t know, neither do our models; everything is all over the place. That was the unsettling message of the Bank of England’s latest prognosis for the British economy. It could just as well still be shrinking next year and the year after – or not. Much the same is true of inflation, where there are “significant risks in each direction”.

As for commercial banks, they may now have enough capital – or not. All that the Bank was clear about during Wednesday’s release of its quarterly inflation report was that the recovery will be slow. Not much there for botanists, in other words. UK stocks fell, bond prices rose and sterling weakened on the prospect that interest rates will stay near zero.

Mervyn King, the governor, was as circumspect about the effects of quan- titative easing. Buying government bonds with newly printed money may have helped keep bond yields low – or not. It is impossible to know what would have happened otherwise. Arguably, bond yields would be lower today if the Bank had not used QE. After all, money printing is usually a strong signal to sell bonds. Mr King, addressing such fears, was mildly reassuring when he said the Bank would “try to keep” inflation close to its 2 per cent target.

Still, one promising sign is the continued fall in interbank lending rates. That shows banks, at least, are willing to lend to each other. But it says little about bank lending to the real economy.

Average lending rates to non-financial companies dropped from December by more than a percentage point to about 2.5 per cent. But that easier credit may now only be available, as the Bank notes, to low-risk big companies. Less bankable smaller companies may still be shut out. Ultra low interest rates, and the potentially inflationary finance of QE, have done little to help their lot.

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