However, he said a lot depended on resolving the Eurozone crisis, which is a "black cloud" hanging over the UK since Europe is such an important trading partner.

He also said: "I think the next quarter will probably be up. I think we're beginning to see a few signs now of a slow recovery, but it will be a slow recovery. After a banking crisis one can't expect to get back to normal and I fear it will take a long time."

He also said it would be acceptable if the government's deficit-cutting target to curb the gap between UK income and spending by 2015, was missed as long as the reason is slower global economic growth.