The Mansion House speeches of Chancellor Alistair Darling and Bank of England Governor Mervyn King began to align official views with the reality of the economy. The Bank has been more realistic all along, in contrast to ministers happily singing the bizarre tune that Britain is likely to be less affected than other countries by the slowdown.

I have argued here in the past that precisely the opposite is the case, given Britain’s unusual dependence on financial services, and the UK’s particularly enthusiastic housing boom.