Uncertain markets and lacklustre political policies bode ill for rest of 2011

No white knight has yet appeared to rescue a floundering world economy. Options are running out for politicians as markets continue violent swings, fear takes hold and recession seems a certainty.

There is no one riding to the rescue of the world economy this time. While it could be argued the relatively decisive co-ordinated political response in 2008 helped to avert a global economic downturn, the prospects for such a rescue operation this time around are limited for ­several reasons.

Top of the list is the fact the banking crisis has become a sovereign debt crisis. With the transfer of the problem from banks to governments has come an almost lethargic response to what sensible observers