Banks told to bring in cash as crisis buffer

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THE economy has probably avoided another recession, Bank of England policymaker Martin Weale said, although he warned the recovery will be choppy and cash-strapped households will remain reluctant to spend.

His comments chime with a renewed dip in consumer morale and soft lending figures.

Recent business surveys show an improvement in the economy after it shrank in the final quarter of last year.

The Government is hoping that falling inflation will enable consumers to spend more this year.

“In the first quarter of this year things have been better than I’d anticipated. I think it’s more likely than not that growth will be positive,” he said.