At the beginning of the year, the UK appeared to be one of the countries most exposed to the full force of the US downturn.

With a stronger technology sector than most European countries, and a heavier reliance on financial services than any other large economy, Britain was particularly vulnerable to a downturn led by a slump in technology industries and falling stock markets.

In the event, Britain appears to have been the strongest of the Group of Seven large economies through the second and third quarters of the year.

Many other European countries have had to revise down substantially their official forecasts made at the beginning of the year. Over the summer Gordon Brown, the finance minister, looked over-optimistic in predicting that the UK economy would grow by between 2.25 per cent and 2.75 per cent this year. But now, helped in part by substantial upward revisions to initial official estimates of growth, the lower bound of that range now seems perfectly achievable.

Britain's technology sector and London's investment banks have indeed been hit hard. But the economy has been sustained by the prodigious strength of consumer demand.

The British public has largely shrugged off the torrent of bad news from the world economy. Opinion surveys show that when asked for their perceptions of the economic situation in general, people are as gloomy as they have been since the global financial crisis of 1998. But individuals' perceptions of their own financial prospects are much more upbeat.

Although unemployment has edged up very slightly, and house prices may have peaked, real wages are still rising strongly and interest rates have been falling; the result has been that consumers have been on a debt-fuelled spending spree.

Household debt is growing at around 10 per cent a year, and the volume of retail sales is growing at almost 6 per cent a year.

So, while internationally-exposed sectors of UK industry have been suffering, those dependent on domestic demand have been thriving.

In the first half of the year, service industry output rose at an annual rate of 3 per cent, while manufacturing output fell at a rate of 3 per cent.

The question is: how much longer can Britain continue to hold out against the worsening global conditions?

Both fiscal and monetary policy are strongly supportive of demand. The timing of the current increase in public spending has been lucky rather than well-judged - the plans were drawn up in March 2000, when the world economy was still booming - but it has meant that Britain is getting a fiscal stimulus at exactly the right moment. The injection to demand is worth around 1 per cent of gross domestic product for this year and again for next year - more than for any other large EU economy.

Monetary policy, too, has been relaxed more rapidly than in the rest of the EU. With the exception of an upward blip in August, inflation has stayed consistently below the government's 2.5 per cent target, allowing the Bank of England to cut its main interest rate to its lowest level for 37 years.

Earlier in the summer, both Sir Edward George, the Bank's governor, and Mervyn King, the deputy governor in charge of economics, warned of the imbalances created by the divergence between the domestic and internationally-exposed sectors of the economy.

But a majority of their colleagues on the Bank's monetary policy committee have taken the view that the "two-speed economy", as it has become known, is preferable to a no-speed economy.

One fear has been that if the pound were to fall sharply, the effect on an economy still operating at close to full capacity might threaten a steep rise in inflation, which would force the Bank of England to respond by raising interest rates, crushing the British consumer at last.

So far at least, the pound has been remarkably stable. Some economists have worried that a widening trade deficit would undermine it. But this year's current account deficit could turn out to be around 1.5 per cent of gross domestic product -less than last year's. Next year's deficit could well be bigger, but it will still be well below the levels of more than 4 per cent in the US last year, or in the UK at the height of the last boom in the late 1980s.

As the US has proved in recent years, there is anyway no necessary close connection between a wide trade deficit and a weak currency.

A fall in the dollar would very likely pull the pound down too, but a plunging dollar might well be accompanied by a fall in US stock markets and a further downward revision in assessments of economic prospects. In which case the prospect of a surge in inflation that required higher interest rates to suppress it might seem remote.

The other concern has been the accumulation of household debt, which has risen to more than 70 per cent of national income, compared with only about 50 per cent even at the peak of the previous boom in 1988.

The debt build-up has sustained consumer spending: the Bank of England estimates that in the first half of the year the rise in mortgage equity withdrawal - people borrowing against the value of their homes to spend on other things than housing - was equal to two-thirds of the increase in consumption. But it may spell trouble for the future.

One risk is that, if the world economy bounces back quite quickly next year, and inflationary pressures begin to emerge again in Britain, a rise in interest rates could have a crippling effect on heavily-indebted consumers.

Raising rates sufficiently but not excessively would be a delicate judgment for the MPC.

The other danger is that if the global outlook continues to darken, and unemployment continues to rise, consumers' enthusiasm for plunging further into debt could evaporate quite quickly.

Either way, Britain's unusual period of outperformance may not last for very far into next year.