The weakest quarter of economic growth is probably the one that is coming to an end. That is the view of Royal Bank of Scotland head of fixed income research, Kit Juckes.

Juckes was in Bahrain last night as a guest of the Bahrain chapter of the Chartered Financial Analysts at their annual awards ceremony at the Ritz-Carlton Bahrain Hotel and Spa.

"What we saw in the period before the economic crash was the easiest monetary policy in a generation which gave us the strongest economic growth on record for any period in history," he said.

"It also gave us the debt bubble, the asset bubble and the leverage bubble.

"But the credit crunch is about to start to end. Central banks are tackling the lack of available credit and we can get to a position where banks will start to lend."

"The problem is that the US consumers may not be happy about borrowing. In 20 years they have taken their savings rates from 10 per cent to zero.

"Within six months that could be back to 5pc but they will not be happy until it gets back to 10pc. What we need is to see governments spending more money.

"Banks will be prepared to led money but people are not likely to want to go on another debt-fuelled binge when they are worried about the value of their houses, have seen their share portfolios slump and are now worried about their jobs."

He said that the recovery remained some way off and it was bound to be modest and anaemic.

However he argued that quantitative easing, whereby the governments created money for the markets would work.

"It has worked throughout history as far back as when the Spanish went to South America and flooded the local market with gold which saw a massive increase in their money supply on which they built an empire," he said. "It also resulted in a collapse in the gold price.

"The Bank of England was set up to create money so the king could fight the Spanish and the majority of historic wars have been fought by temporarily breaking monetary pegs with gold."

"Quantitative easing is the right thing to do right now. It is not going to be inflationary because the world has too much excess capacity and it will not create currency swings because everyone is doing it," he said. - TradeArabia News Service