Alistair Darling warned on Thursday Britain’s economic recovery could be held back by rising oil prices and a failure by other European countries to clean up their banks.

Describing himself as “confident but also cautious” over the prospects for the economy, the chancellor of the exchequer has been buoyed by recent economic forecasts suggesting the UK is moving out of recession. But he will warn at a G8 meeting in Italy this weekend there are still clouds on the horizon.