If, and it’s a big if, the economy is at a turning point, then policymakers have to be on their mettle to move quickly – and to do so in the face of howls of protest.

Hopes of an imminent recovery are probably overdone. For every morsel of good news, there is still a heap of bad. An improvement in the services sector and signs of easing in the availability of credit have to be balanced against the thousand or more jobs still being lost each day.

The signals are mixed. Nationwide’s report on Thursday that house prices rose in March for the first time in 16 months was followed by yesterday’s survey from Halifax, which said, no, they didn’t, they fell again. But if the green shoots prove real, then there is a case for fiscal and monetary policy tightening, and sooner rather than later.

It feels premature to suggest it, but by the time any recovery were really to take hold, it would be too late. Interest rates are at historic lows. The public spending tap is on full pelt. In normal times, this would be seen as fatally inflationary. Indeed, inflation rather than deflation, is back on City lips as the more likely threat.

The Bank of England has been through the wars. But the biggest test may still be to come – having the courage to start raising rates before the blizzard of job losses and business failures has abated.

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