Economic forecasters are now turning away from the much-hyped V-shaped recovery pattern, and even a more leisurely U-shape, to a wobbly “W”, or double-dip delayed type of recovery for the UK economy.

The recently pushed swift bounce back is looking increasingly lame.

New figures clearly show that the economy shrank by 2.4pc in the first quarter of this year. This is a revised number down from the 1.9pc previously reported.

It illustrates that the UK is in a much worse downturn than many expected and so-called green shoots of recovery are isolated statistical blips.

It’s clear the British economy is still in freefall. As in the 1980s, the biggest decline has been in manufacturing. While the public sector has continued to grow, the makers of things have taken blow after blow.

The weakest sectors have been new housebuilding and car making.

This is beginning to look very serious indeed for UK industry and any company in the private sector.

Amid all the gloom of a gathering depression and a bout of deflation, is London still the financial capital of the world?

It may not be a useful question to ask especially since all the others have been affected in the same way, and Wall Street practically wiped out.

However, here’s a little bit of nostalgia from this site showing how it was just a few short months ago:

In a survey of financial executives by the Global Financial Centres Index, London scored well ahead of its rivals, and even extended its lead.

London did better than New York on an array of topics, including personnel, business environment, market access, facilities and competitiveness.

The City scored 806 out of 1000, compared with nearest rival New York’s 787. Trailing behind came Hong Kong, Singapore, Zurich and Frankfurt.

Again London is reaffirmed as the world’s financial capital.

You couldn’t make it up.

An hour ago, the Bank of England duly obliged on expectations and cut interest rates by 100 basis points to two percent, the lowest figure since 1951.

Other central banks are slashing rates too.

Sweden’s central bank today cut its key rate by a record 175 basis points, to two percent, the largest since 1992 when the country famously nationalized its major banks.

New Zealand also announced a cut of 150 basis points to a five-year low of five percent. Further cuts are on the cards.

Indonesia made a surprise 25 basis-point cut to its rate, to 9.25 percent.

Yesterday, the Bank of Thailand cut rates by 100 basis points to 2.75 percent, some of which may have been due to recent political turmoil in the country.

On Tuesday, the Reserve Bank of Australia surprised markets with a 100 basis-point cut to 4.25 percent.

The European Central Bank is expected to cut again today, but signals are mixed. The Shadow ECB has called for swift, deep cuts from its current rate of 3.25 percent. However, voices close to the ECB warned not to expect them.

Generation after generation has to make the choice between free markets and Government regulation.

The solution seems to turn on the nature of the business cycle and the strengh of current booms and downturns.

In the present world recession the context is so severe that it’s become a crisis in both the financial markets and the real economy. Many governments are having to nationalize part or all of their banking systems. Financial services never seemed so brittle.

Is that really the case though? In a well-argued article, The world needs Up-To-A-Pointism, John Evans suggests that by staying within the boundaries where governments and free markets work best, the world would be a much more stable place to live and do business.

Although mostly mutually-exclusive, the interface between regulation and free markets could be made to operate more efficiently, to the benefit of both.