Despite the apparent threats and the unhelpful international environment, the UK economy seems likely to weather the current storm and emerge from the recession earlier than many others.

Policymakers have responded quickly and decisively and earlier in the cycle than previously. There will, however, be a legacy of this recession, particularly the longer term issues associated with public finances and the unwinding of consumer debt.

Low inflation will continue to be the anchor of policy (but perhaps in an amended form). This adds another new pressure, particularly given the debt overhang.

Debt, personal or corporate, unwinds a lot more slowly when inflation is 2% than it does when inflation is 10%. There are no easy wins or quick fixes any more.

The new operating environment removes much of the uncertainty of the past but does contain its own risks. These are hinted at above and developed more fully in subsequent sections.

The next couple of years, therefore, are likely to prove the most testing for the policymakers since inflation targeting became the key policy objective in the wake of the ERM debacle.

When to put quantitative easing into reverse, the timing of the first interest rate rise and getting to grips with the £175 billion fiscal deficit will be top of the agenda, issues to which there are no easy solutions.

Not far behind will be the future health of the banking system, the need to generate more growth in the tradable goods and services sectors, the size, structure and cost of the public sector, and moving industry and consumers towards a green agenda.