The IMF now tells us that Britain will suffer a worse recession than any other industrialized country. The roots of this lie far back in the past, more recently in the 1980s, when the decline of our manufacturing was justified as marking Britain's transition to a 'service economy', supposedly able to pay for our imports from primary producers (i.e. poor countries) and manufacturing economies by our exports of services such as banking and insurance. Our governments came to boast of the strength of the City, which would ensure our continuing prosperity.
The City having now collapsed into a black hole of debt, we must now accept a steep decline until the pound reaches a level at which our manufactures can compete with those of other countries and can attract investment in their future. If this is part of a process of reducing the gulf between rich and poor countries it will be a good thing. The danger is that it will happen so fast and chaotically that it will disrupt society, strengthening the appeal of extreme political movements. Hold tight for a rough ride!
What we must guard against is the idea that in a year or two we shall be "back to normal". In fact there was nothing normal about the past ten or thirty or fifty years, with the population of the poor countries growing and the average income in the rich ones rising at unprecedented speeds. We must now invent a new world economy and learn to live with a new idea of normality.