It might look much the same, but the credit crunch has entered a difficult new phase. As one gloomy wag put it, this is not just a matter of the misery continuing; it is about the misery worsening.

In a matter of days, expectations of future inflation have markedly worsened. Economists have been wrong-footed by rocketing crude oil and other raw material prices and their likely effect on prices.

Policymakers, who a few weeks ago were happily planning interest rate cuts, are now confronted with the grim prospect of rate rises in order to keep inflation in check.

The baleful spectre of a prices/wages spiral is in the front of the minds of anyone who can remember the 1970s. Banks are falling over themselves to slam the door in the faces of potential customers. The 27,000 families a week coming to the end of attractive mortgage deals and having to refinance are discovering quite how tight conditions have become.

Anyone under the age of 35 simply has no experience of a world where credit is not plentiful and cheap. It is proving a rude awakening.

It took a while to arrive, but the big freeze in the credit markets is now feeding through with a vengeance into falling house prices and deserted building sites.

The credit crunch is no longer about City boys losing squillions in esoteric derivative trades. It is about plumbers and plasterers losing their jobs. Eleven thousand people a month will lose their jobs in the next 18 months, the CBI reckons.

The fertiliser of a booming housing market – which boosted growth in so many corners of the economy from furniture stores to broadband connections – has run dry.