I don't want people talking themselves into something which, at this moment, isn't actually there

Digby Jones

Digby Jones said the fundamentals of Britain's economy were holding up well and companies were in better shape than ever before to weather a slowdown.

He blamed the media - and financial journalists - for spreading gloom about the economy.

Speaking on BBC Breakfast, Mr Jones said: "The financial reporting seems to be saying that things are going down, but actually the fundamentals of people's businesses - the turnover, the activity, the orders, are holding up across sectors."

'Obvious slowdown'

Mr Jones, who is due to address the Liberal Democrat conference later on Tuesday, went on: "Our big worry is that Britain might just be talking itself into something that, there at the coal face and in the high street, isn't actually happening."

Mr Jones conceded that the CBI's own industrial trends survey has consistently showed signs of an economic slowdown.

"No-one is saying there hasn't been a slowdown, but the fundamentals of the UK economy are very good," he said.

'Quality of lending'

"We have low interest rates, low unemployment and low inflation," Mr Jones added.

"Companies are in much better shape than in any other slowdown, in '91 and '81.

"The quality of the lending book is better, there is not that high gearing."

He added: "We are in much better shape to deal with what's ahead than we have ever been before.

"There is a big difference between slowdown, and challenging times, and recession and I don't want people talking themselves into something which, at this moment, isn't actually there."

Bank of England view

Mr Jones said a lot of the job cuts announced in the United States in recent days would have been in the pipeline before the tragic events in Washington and New York.

But his words were in contrast to the governor of the Bank of England, Sir Edward George, who said it was "too soon to say" if Britain would avoid a recession."

Giving the clearest indication yet that Britain might be on the brink of a major downturn, Mr George said: "The overall impression, at this stage, is that we will see some weakening in the current quarter and perhaps in the next quarter."

The generally accepted definition of a recession is two quarters of negative growth.