DESPITE aggressive moves by policy makers the state of the economy will not be lifted any time soon, a senior banker has warned.

Speaking at a Chamber of Commerce lunch this week, Robert Gardner, the head of the RBS Group’s macroeconomics team, said that Islanders should be prepared to remain in the grips of the credit crunch for the next few years.

‘It’s going to be tough and it’s not going to be over quickly,’ said the former economic adviser for HM Treasury. ‘It’s no surprise the economy is slowing because so many sectors have come under pressure recently and household incomes have been feeling it for quite a long time, with wage growth failing to keep up.

‘Even though we’ve been aggressive in previously lowering interest rates, it’s not been feeding through to the economy in the same way it did in 2001 when we bounced back from a slow-down. The difference is that in 2001 people were willing to take on more debt but now the focus is financial consolidation, so lowering interest rates will not result in big increases in consumer spending.’