Andrew Wilson, deputy chief economist for the Royal Bank of Scotland, warned that today’s consumer could no longer lead economic growth. “That will be down to business investment,” he said.

UK plc had stable growth and low inflation but lagged behind its competitors in productivity levels, skills, infrastructure and research and development investment.

However, last year saw 100,000 personal insolvencies in the UK and Mr Wilson, a former Scottish Nationalist MP, told guests at the RBS breakfast briefing at the Hilton Milton Keynes: “The momentum for the economy has to come from sectors other than the consumer. It is down to leadership and management of business. Your decisions have a direct effect on what happens next.”

After two years of a buoyant global economy, business leaders had become gloomy. However, Mr Wilson said, growth charts were traditionally shaped like Batman’s ears, with one growth peak followed by a dip before a second peak.

“We have had one Batman’s ear and we think there is enough momentum in the global system to give another fillip.”

Consumer spending accounts for 66 per cent of wealth creation in the UK, business investment 10pc, public sector spending 23pc and import/export a net balance of -3pc.

Stability of interest rates had created the certainty business needed to address investment and strategy issues, Mr Wilson said, but RBS was adopting a more cautious forecast than the Bank of England.

“What happens in the months ahead will drive the next decision on interest rates and the economy as a whole. We are not sure that the consumer has the legs to carry it.”

The Retail Price Index has risen by 6.7pc since 2003, earnings have increased by 9.5pc and the prices of leisure goods, clothing and footwear have seen a net fall due to increasing exports from Asia. However, mortgage repayments have risen by 46pc, fuel by 35pc, petrol by 19pc, utilities by 17pc and council tax by 10pc.

“That is what has kept the consumer at bay,” Mr Wilson said. “The key question is whether companies are passing on profits to their workforce. If inflation gets into earnings, it gets into the system and that is when the MPC starts to worry.”

Inflation looked set to peak in January, just as many firms implement their annual pay round. Unemployment was also rising, with more people chasing the same number of jobs. “One in three coming into the labour force are those of retirement age, Mr Wilson said.

With inflation rising and the rate of growth beginning to slow, he advised companies to budget for an interest rates rise.

“If the MPC acts too late, inflation becomes out of control and it will have to slam the brakes on hard. If it acts too early, it might snuff growth out,” Mr Wilson said.

“This is the moment when the MPC earns its corn.”

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