Q&A

JLA: What sort of recovery do you expect?
NL: I expect gradual recovery, possibly with occasional negative quarters. The ability of the banking sector to lend remains limited, not least because it needs to repay Government. We have seen the bad debts from the bubble, but we're yet to see the full knock-on effects of recession.

JLA: What has this recession taught us about globalisation?
NL: Globalisation remains the most powerful engine to improve the conditions of poorer nations. It would be a tragedy if the mistakes of a few wealthy countries produced a reaction that would only damage the less well off. We've seen covert protectionism in financial and industrial sectors - a thoroughly bad thing.

JLA: Is the G20 capable of agreeing and imposing smarter regulation?
NL: The best regulation is at national level and anything that weakens that poses risks. It's true that large financial groups can only be regulated by co-operation between countries and regulators, but the danger is that agreement is only possible at the lowest common denominator.

JLA: Can Britain learn from Canada in controlling public spending?
NL: Britain probably can learn about how to restore discipline, though what's needed is not imitating other countries but a determination to do the inevitable. There should be no exempt areas on public spending.

JLA: Is the low pound here to stay - and does it bring a net benefit?
NL: Britain's flexibility with the exchange rate has been a definite plus. If we'd been in the Euro our situation would have been even worse - though the weak pound has also resulted in higher inflation.