Summer holidays are here, a good time to reflect on the past and on what is to come. After seven months of being battered by the twin shocks of a global credit crunch and surging oil and commodity prices, should we brace ourselves for an even grimmer autumn and winter?

The fall in the oil price from farcical to merely ridiculous levels, with other commodity prices easing in tandem, is good news, though it needs to drop a lot further to take one of those twin shocks away.

Evidence of an easing of the credit crunch is harder to find, despite slight reductions in mortgage rates, better news from some American banks and signs that predatory buyers are following Santander’s example and circling some of Britain’s troubled mortgage providers.

This may, however, be just clutching at straws. The record low for new mortgage approvals reported by the British Bankers’ Association last month, two-thirds down on a year earlier, shows an unprecedented squeeze on credit availability.

Retailers, if you believe the official figures, have gone from boom to bust in a month, May’s record 3.6% surge in sales volume being followed by June’s unprecedented 3.9% plunge. The consumer trend, with sales up 0.6% in the second quarter, is plainly slowing. That is also true for the wider economy, which recorded its 64th consecutive quarter of growth in the second quarter, but of a mere 0.2%.

One good way of looking forward is with the National Institute’s latest economic review. The National Institute of Economic and Social Research (NIESR) is the oldest of Britain's economic analysis and forecasting bodies, founded 70 years ago when John Maynard Keynes was still in his prime. At times during the Thatcher years, though not now, it was a kind of Treasury in exile.

Its latest forecast is interesting and not good news for retailers. Britain, it says, will have an outright consumer recession, with household spending dropping 0.8% next year after expected growth of 1.9% this year; 2010 will not be much better, with a spending rise of just 0.6%. Not for a long time have consumers been so squeezed.

Yet this predicted consumer recession will not result in a general recession, the institute says, despite the fact that household spending is roughly two-thirds of Britain’s gross domestic product.

Over the 2008-10 period the economy will have its weakest run since the recession of the early 1990s, with growth rates of 1.5%, 1.4% and 1.9% respectively. But this will still be a slowdown rather than a recession. The NIESR’s main forecast does not even have a quarter of declining GDP, so maintaining the record expansion that started as long ago as the spring of 1992.

Is it possible for the economy to grow while the consumer is in recession? NIESR acknowledges the risk of an outright recession — a fall in GDP next year — at just over one in 10. Sticking with its main forecast, however, where does growth come from?

One source is the government. While public spending is targeted to slow this year to 2% real-terms growth, from an average of 4% to 5% over the past few years, this is still enough to contribute half a percentage point to growth annually. Another contribution comes from investment and inventories, predicted to add at least half a percentage point in 2009 and 2010. The biggest effect, however, comes from trade.

NIESR is not forecasting an export boom. Growth in overseas sales over the next three years is below 1.5% annually, but it expects an import slump, because of falling consumer demand. This improvement in “net” trade, with a halving of the current-account deficit from £60 billion last year, 4.3% of GDP, to 1.9% in 2010, makes the biggest contribution to keeping the economy’s head above water.

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