America's five-year downturn

What the central bank of the world's biggest economy, the US, said last night was that there would be no proper recovery in that economy for at least another two years.

That was the meaning of the announcement of the US Federal Reserve that it anticipates holding its official interest rate, the so-called federal funds rate, at exceptionally low levels "at least" through mid-2013.

Those exceptionally low levels are between 0 and quarter % - or as close to zero as it is possible to get.

This is quite remarkable. It is an official recognition that the credit crunch and banking crisis of 2007-8 is likely to still be preventing adequate growth in the US five years later.

And if that's true of the US, it is also likely to be true of the eurozone and the UK.

So although shares in the US and Asia have risen following the announcement from the Fed that it is doing what it can to foster some kind of proper recovery - and presumably UK shares will follow their lead - there is no grounds for euphoria.

Apart from anything else, if the Fed's and the Bank of England's policies of keeping money cheaper than it has ever been hasn't returned the US and UK to better-than-anaemic growth in the past three years, it is questionable whether it will be a sufficient condition for proper recovery in the next two years.