In such circumstances, the markets were justified in expecting just a little bit of help from Eddie George and the Bank of England, as they were last week from Alan Greenspan at the US Federal Reserve. So did we get 1 per cent off rates? No, that would be far too bold and presumptuous. Did we get half a per cent, perhaps the bare minimum necessary to stop the madness in financial markets plunging us wholly into recession? No, we got a quarter of a per cent in both cases.
Obviously it is important for central bankers to stand back from the global panic and take a considered view. They also have their domestic inflation targets to think about, and in the Bank of England's case it is debatable whether meeting it justifies a cut of even a quarter of a point.
Even so, this is not the time for keeping religiously to the letter of the remit. The newly independent Bank of England was too cautious in putting up interest rates when inflationary pressures were building. Now it is being too cautious in cutting them back again. Short-term interest rates are going to have to fall markedly over the coming months to treat the wounds financial markets are inflicting on our domestic economy. Of that there can be no doubt. We can only hope the Bank hasn't left it too late.