When the eurozone goes, it will go suddenly. One moment it will be there, and then it will have vanished into the historical annals of catastrophic human vanity projects that disappeared.

The worst case scenario is that a worldwide contagion begins on the European continent. August 1914 will have its 21st-century anniversary in four years. And the grandiose political vanity of Continental politicians will be again at the heart of it.

This sunny spring could represent a kind of Edwardian glow before the chancellory lights go out once more across Europe.

Read the rest of this piece on our sister site: Syntagma

In a TV interview on Sky News, Michael Geoghegan, Chief Executive of HSBC said the new 50 percent tax rate in the UK was “strange” and was causing many bankers to leave the UK to set up in Switzerland and other countries. He himself is moving his office to Hong Kong next week, although the banks HQ will remain in the City of London.

“I think when you start moving taxation for political reasons, the trouble is that it is an industry that can move,” he told Jeff Randall Live. Asked if damage was being done, he replied: “Yes.”

Hethought people in the UK had been given an easy ride because interest rates had been slashed close to zero, but he predicted pain ahead as inflation rises. “As interest rates come back up, that’s going to start squeezing and that does need to happen.”

Mr Geoghegan will, however, still spend up to a third of his time in the UK. He believes Britain needs to wean itself off debt and rein in its fiscal stimulus “sooner rather than later. How we finance our lives does need to change and I think, as the Governor of the Bank of England came out and said, we’ve got to start with our shopping list, we’ve got to cut our costs and I think that needs to start, not just in the UK but in other places, to stimulate all the economies.”

He said UK moves to toughen up regulation risked making the City unattractive. “The UK is leading it and it has been doing some very sensible things but the rest of the world hasn’t come forward so in a way I think maybe the UK is moving too fast.”

The Governor of the Bank of England, Mervyn King, has lost his attempt to extend quantitative easing (QE) to £200 billion.

The minutes of the Bank’s monetary Policy Committee for this month illustrate the gaping divide between the deflationists and their opposite numbers, the inflationists.

Quantitative easing is a term covering the Bank buying up Treasury bonds (gilts), issued by the Government to fund its borrowing requirement. Mre simply, it’s “printing money”.

The process is a bit like a snake eating its own tail, with one part of the government process buying up the debt of the Government. In normal times, it’s widely regarded as national suicide. Not now, apparently.

King’s move has already spooked the markets, with the pound sinking against the dollar. Stock markets around the world are also retreating on a general wave of disbelief that all the talk of green shoots can be sustained. The reality of the world’s huge over-capacity will bite in the autumn on the back of more massive job losses.

The Governor’s pessimism arises because the risk of “another large stimulus might be less than the possible costs of acting too cautiously.”

New figures show that the UK economy shrank by 2.4pc in the first quarter of this year. This is a revised number down from the 1.9pc previously reported.

It shows that the UK is in a much worse downturn than many expected and so-called green shoots of recovery are isolated statistical blips.

Many forecasters are now turning away from the much-hyped V-shaped recovery pattern, and even a more leisurely U-shape, to a wobbly “W”, or double-dip delayed type of recovery.

It’s clear the British economy is still in freefall. As in the 1980s, the biggest decline has been in manufacturing. While the public sector has continued to grow, the makers of things have taken blow after blow.

The weakest sectors have been new housebuilding and car making.

This is beginning to look very serious indeed for UK industry and any company in the private sector.