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‘Quantitative easing must speed up to save economy’

"It’s totally inadequate. I would say the Government needs to inject at least £300-£400billion and in much larger blocks to really get the economy moving – the £75billion they have pledged might not be enough to be noticed."

Turner welcomed the new lending from banks including Lloyds, RBS and Northern Rock – but said too much of this money would be going to business and not enough to ordinary home owners.

"For example, out of the Lloyds announcement only £2billion of lending will go into mortgages – it is mostly going to business,” he said.

"This will help because it could slow job losses and aid British businesses – but the amount of money is still too small and more money needs to go into the housing market.

"People need to remortgage and buy properties – and once they can do that they will start buying on the high street again.

"Whether quantitative easing works is a matter of time but I would say it will still take 18 months to two years for the country to get back on its feet – and even then, we won’t see 125% mortgages again, which is not a bad thing."

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