Bank of England Governor Mr Eddie George has said the risks of a global economic slowdown had increased but he did not think a meltdown was imminent.

"There is no question that we are going to see a global slowdown. We are seeing a global slowdown already," he said

"The question is whether the new dimension of financial fragility is going to turn that into something significantly worse than contraction in growth."

He said that if there was no new shock like the Japanese economic crisis or the near collapse of the Long Term Capital Management hedge fund in the United States, there was a reasonable chance that nothing worse than a slowdown would occur.