The greatest threat to recovery is a continuation of the banking crisis reducing the availability of credit to business credit, say economists.

Ian McCafferty of the CBI employers’ body argued that, until credit flows were restored, “the economy will continue to be starved of oxygen and the impact of both monetary and fiscal policies will remain constrained”. George Magnus of UBS, who has warned about the risks of economy-wide asset sales and shrinking balance sheets, said governments were the only players in the economy that could “ensure good borrowers get access to credit and use public programmes to stimulate aggregate demand”.