The rate of economic recovery is likely to be weak over the next few years, it has been suggested.

Charles Davis, economist at the Centre for Economics and Business Research (CEBR), said business and consumers alike have high expectations for the level of growth.

"There probably needs to be an expectation adjustment and if people were expecting living standards to improve at the same rate, they are likely to be disappointed," said Mr Davis.

National debt management problems are continuing due to the high amount of borrowing by the government, Mr Davis added.

According to figures published by the Office for National Statistics, the public sector showed a deficit on the current budget of £9.9 billion in June, compared with a deficit of £5.8 billion in the same month last year.

Furthermore, a review by the National Institute of Economic and Social Research found consumer spending will fall by 3.5 per cent in 2009 and by 1.1 per cent next year.

Unemployment will peak at almost three million or 9.3 per cent of the labour force in spring 2011, it predicted.