The Bank of England has become the first major central bank to endorse the argument that we are moving towards a 'New Normal'.
In an important speech this week, its Governor Mervyn King, set out the argument that we can look forward to:
"a SOBER decade - a decade of Savings, Orderly Budgets, and Equitable Rebalancing".
And he contrasted this with the recent past:
"the Non-Inflationary Consistently Expansionary - or 'NICE' - decade from the early 1990s to the early 2000s".
This is very much in line with the arguments put forward in the blog's White Papers on 'Budgeting for a New Normal' this year.
A similar message has come today from the USA, where Treasury Secretary Tim Geithner, told the Wall Street Journal that "The rest of the world wants us to save more--and that means less U.S. demand for the rest of the world. Demand is going have to come from other sources."
This transition to the New Normal is not going to be easy. Chemical companies now preparing their Budgets for 2011, should expect plenty of bumps in the road.