Next Gen News

The coalition's critics decried the government's response to the crisis as inadequate. Labour's former deputy prime minister, Lord Prescott, took to Twitter to claim that No 10 was being run by Larry the Downing Street cat, while shadow chancellor Ed Balls accused the government of failing to offer leadership and being "absent from the global economic debate at this critical time".

Cable repeated his belief that a fresh round of quantitative easing – effectively the printing of money by central banks – may yet be needed, but acknowledged that this was "not on the agenda at this precise moment".

Some old hands were cautioning against reading too much into what happens to stock markets during the summer. Lord Oakeshott, a former Treasury minister who has worked in the City for 35 years, was sanguine, explaining that he was an enthusiastic buyer of shares on Friday as the markets were falling.

"Markets often overreact in August," he said. "All the top fund managers and traders are sunning themselves. The B-teams are on the desks and they tend to run scared."

But others are less sure. Michael Hewson, an analyst at CMC Markets, warned: "This crisis will run and run and could Lehmans like a Tupperware party look \."