Roger Bootle is on excellent form this morning. His book from a few years ago ‘Money for Nothing’ is worth returning to as a salutory warning of the risks of an economy hooked on borrowing expectations of double digit returns from an age of cheap money.

“Confidence in the financial system is a public good and collective action, backed by the enormous financial resources of the state, is the only answer. It is like defence or public health…..The fall in house prices, and now the huge falls in equity prices, will deflate wealth and result in lower spending. Real incomes are falling. Moreover, even if the banking crisis is staunched, confidence in the financial system has been shattered. This will breed a mood of caution among both individuals and businesses.”

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