It was 20 years ago today… well, not quite. It is 20 years since the Bank of England published its first quarterly inflation report in 1993. But the difference between the outlook for the British economy then and now is dramatic. Back in the slowdown of the early 1990s, the UK economy suffered a less severe drop in GDP than we have seen over recent years, but it did have to grapple with high inflation (see chart 1). Coming out of that recession, the UK experienced a period of sustained growth and moderate inflation – a prospect that we would now grab with both hands given half the chance.

Twenty years on, the Bank's report paints a picture of anaemic growth in 2012 which is expected to be followed by 'a slow but sustained recovery'. In other words, the UK won't reach its pre-crisis levels until at least next year. The reasons for weak growth in the past and poor prospects for the future have been hashed over in miles of column inches. Even trainee economics students know that a combination of private and public sector deleveraging, banks reluctant to lend and corporates unwilling to invest has produced the unappetising economic prospect now before us.