Bad news feels even worse when you are powerless to respond to it. That is the situation of the Bank of England, which is faced with a serious economic slowdown but cannot cut interest rates because of grave risks to inflation. The result will be a dismal period for the UK economy – not necessarily a recession, but something that feels like one to consumers – and there is little that anybody can do about it.

The Bank held interest rates at 5 per cent this week despite a flow of weak data over the past month. Surveys of purchasing managers show softening in all sectors of the economy. The 6.1 per cent year-on-year house price fall in this week’s Halifax survey is consistent with an accelerating decline in the property market. The Bank’s survey of credit conditions, meanwhile, showed that banks are lending less and charging more when they do.