FINANCE ministers from the G8 economies meeting in Italy yesterday claimed there were "signs of stabilisation" in the global economy, but said recovery prospects were uncertain.
Though the G8 discussed so-called exit strategies from the unprecedented measures to prop-up banking systems and lift economies out of recession, no agreement was reached.
Alistair Darling, the chancellor, told the meeting that the priority for the coming months should be to ensure that any signs of recovery are nurtured. He repeated his view that Britain's economy will begin to grow before the end of the year.
A senior Treasury official said "2009 is all about shoulder to the wheel, not taking our eye off the ball and maintaining the momentum for reform on financial regulation".
Darling will refer to financial regulation in his Mansion House speech this week. In it, he will remind City bankers that the financial crisis mainly reflected their mistakes rather than failures of regulation.
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However, he will also accept the need for changes in the tripartite system of regulation - divided between the Treasury, Bank of England and the Financial Services Authority - including a greater focus on macro-prudential regulation, monitoring the behaviour of institutions to take into account their impact on the economy, and the financial system as a whole.
It has been suggested that most of the responsibility for macro-prudential regulation will lie with the Bank of England.
Darling's explicit rejection of an early exit strategy for the current range of emergency policies will reinforce City views that Bank rate is likely to remain at 0.5% for some time.