Britain's economy now as bad as 1970s, JP Morgan warns - by Robert Winnett

JP Morgan, said that in “many” ways “the UK’s fiscal position is currently worse than observed around the IMF loan in 1976”.

The bank warns that Government debts, when compared to the total size of the economy, are higher than during the 1970s crisis.

It adds that there could be a “marked fall” in the value of the pound as international investors re-assess the health of the British economy.

The intervention from JP Morgan is likely to add to the pressure on Gordon Brown and Alistair Darling to set out how they intend to cut Britain’s deficit. JP Morgan is one of the biggest banks in the world with assets of more than $2 trillion – almost as big as the entire British economy. Tony Blair is a consultant to the firm.

Read more: Britain's economy now as bad as 1970s, JP Morgan warns - Telegraph