Essentially, what the precautionary-saving literature says is that more uncertainty reduces the average propensity to consume (APC), the ratio of consumption to income.

In America, the household savings ratio (the proportion of disposable income not used for consumption) has been below 2.5% since 1999; in Britain, it has been below 3% in each of the past two years.

Britain's housing boom was one of the world's largest; its household debt-to-income ratio is higher than America's; and, as in America, a long consumption boom left a large current-account deficit.