This question and answer doesn't just apply to the UK, but also to the EU and US.
Regular readers know that the reason all of these could be the next Japan is that all of these have pursued the Japanese Model for handling a bank solvency led financial crisis and have protected bank book capital levels and banker bonuses at all costs.
The result of implementing the Japanese Model has been that these countries have put the burden of the excess debt on the real economy and put all of these countries into a Japan-style economic slump.
The way to end the Japan-style economic slump is adopting the Swedish Model and requiring the banks to absorb all of the losses on the excess debt in the financial system. This removes the burden of the debt service from the real economy and results in economic growth.
Every day since the financial crisis began in each country, policy makers have the choice to stop pursuing the Japanese Model with its resulting economic slump and adopting the Swedish Model.
For all their differences, Japan and Britain are quite alike. Both have experienced severe financial downturns that left their banks severely impaired. Both have had double dip recessions. Both are operating at levels of national output 3% below their recent peak...
as in the UK, banks that sell bonds to the BoJ tend to sit on the cash. ... Meanwhile, the dire state of Japan's public finances – it has the highest net debt to GDP ratio in the G7 – makes expansionary fiscal policy difficult.
Could Britain become the next Japan? No reason why not.
The concern in London should be that the difference between the two countries boils down to eight time zones and two decades.The same should also be the concern in Washington DC and Brussels.