Phew! It looks as if Europe – and the UK – may escape the indignity of a technical recession after all, at least for now and only by the skin of their teeth.
Both the British and eurozone economies are proving more resilient to the energy crisis than feared.
The UK economy actually grew slightly in November, according to the latest estimate, which means last month would need to show a significant contraction to generate the overall fall in final quarter GDP required to meet the formal definition of a recession (two successive quarters of negative growth).
In the event, retail sales in December seem to have held up better than expected, so when the final tally for the year is published, it's now eminently possible that the dreaded "R" word will be absent.
Things are also looking slightly better than anticipated for the eurozone. In both cases – Britain and Europe – energy support packages have helped to save the day. Without them, the picture would undoubtedly have looked much bleaker.
So much for the good news. Unfortunately, the effect of such support measures is only to delay, or smooth, the pain; it is not negated.
The bottom line is that as a nation, we have just become a whole lot poorer. A combination of rising energy, food, and interest rate costs have eaten deep into disposable incomes. There are a lucky few who have seen their incomes rise in line with inflation, but the vast bulk of the country has not. We can no longer afford to live the way we did.
My guess is that the erosion in living standards over this financial year and next will end up in the 5 to 10 percent region, a level of setback that even the traumas of the financial crisis failed to inflict.
Thanks a lot Mr Putin, the politicians are inclined to say in explaining this shock to the system. I'm obviously not about to apologise for Russia's murderous thug, yet the truth is that it's not entirely his doing.
Putin's invasion of Ukraine, and the sanctions imposed by the West in responding to it, were merely the final coup de grâce.
In the event, wholesale energy prices in Europe have fallen markedly since the peak last summer. This is not going to make any difference to rising bills in the short term as Britain's price cap regime operates with a lag effect, such that energy costs will keep rising for a while even as wholesale prices fall.
The UK's Energy Price Guarantee limits a typical gas and electric bill to £2,500 and is scheduled to rise to £3,000 in March, as the Government attempts to cut the scheme's ruinous cost to the public purse. But that's still much higher than we are accustomed to, even if there is now some possibility that the typical bill will fall below £3,000 at some point later in the year. Everything depends on what happens to wholesale prices in the meantime.
Come what may, the chances of energy costs falling back to where they were before the post pandemic surge are pretty much zero. The blame lies as much with Net Zero targets as it does with Putin, for one of the effects of climate change goals has been to severely curtail wider investment in traditional, fossil fuel sources. The result is supply is dwindling before we are ready to live without them.
This is less of a problem for the US, which has invested heavily in shale over the past decade, than for Europe and Britain, where it was naively assumed that our fossil fuel requirements could simply be offshored until no longer needed.
It's too late now. There is no chance of generating the worldwide boom in hydrocarbon investment needed to shift the dial on energy costs if at the same time you are trying to create a boom in alternative, renewable sources of energy. It's one or the other.
As it is, Europe now has little option but to forge ahead with its intended energy transition, which one day may indeed deliver oodles of cheap electricity. For now, however, it traps the Continent – and Britain – in high energy costs.
So there's one thing that is unlikely to be reversed in any foreseeable future: high energy prices are here to stay.
Nor can these indefinitely be mitigated through state intervention. The Office for Budget Responsibility has estimated the cost of the UK's Energy Price Guarantee, together with the related Energy Bill Relief Scheme for business, at £43.2bn this financial year and £18bn for next. For this financial year, those costs equate to nearly a quarter of all Government borrowing.
This is admittedly partially offset by windfall profit taxes. Even so, intervention on such a scale is plainly unsustainable on any kind of long term view.
If wholesale prices were to return to last summer's highs, the costs would surge to £62.1bn this financial year and £83.9bn next, according to OBR forecasts – way beyond anything that might be deemed affordable.
Replacement of the blanket subsidy with some kind of social tariff is one possibility under active Treasury consideration, such that there would be a price guarantee for bills up to a certain level, but anything above would pay the full market rate.
This would certainly limit the costs to the taxpayer as well as incentivise reductions in energy use, but it doesn't hide the underlying reality – that all of us in some shape or form will be paying a lot more for each unit of energy consumed than we were, leaving less for other things.
The same goes for those with mortgages; for the foreseeable future, they are going to be hundreds of pounds a month worse off, or the very reverse of what happened after the financial crisis when, bizarrely, many households were made richer by fast falling interest rates.
So there's another hit to disposable incomes. This twin squeeze gives international business all the excuse it needs for bypassing the UK as an investment destination, nevermind the perceptual difficulties associated with Brexit.
It's hard to be optimistic against such a backdrop of negatives. By the end of the year, things may have improved a bit, but the erosion in living standards will be an enduring one which is very unlikely ever to be fully recovered.
What's more, the humongous costs to the public purse of the pandemic and the energy crisis will at some stage have to be paid for, making it equally unlikely that there will be any let-up in the pressures for higher taxes.
There is no easy way out of the hole we have dug for ourselves, as Liz Truss has just demonstrated. It was rendered even deeper when she tried to blast her way out of it. She wasn't wrong about the need for growth, but from where?
Britain has been made a whole lot poorer – and there is no way out
Recession may have been avoided, but the worst economic pain is still yet to come