Mervyn King was very honest last night in his speech to the South West CBI-IoD dinner about what is in store for UK plc in 2008. Listening to him with upwards of 725 other South West businessmen was a sobering experience: no flashy delivery, no blinding with science, no self-congratulation on a job so far done well (how unlike Gordon Brown, who cannot resist telling us that even if things aren’t quite as good as they might be (a) it isn’t his fault and (b) that that it is as good as it is is all down to him and his best friend Prudence). Instead, from the Governor a critical summary of where we are, why and what is in store. Aside from the main points in his speech, and see an excellent report by Norma Cohen in today’s FT, two things remain in my mind: that as consumers we must save more and spend less (fairly obvious, but blindly ignored by most of us); and that the fear of what is still to come out of the sub-prime catastrophe in the US is as potent a destabilising force as what is already known.