Financial experts are split today on whether the current turbulence in global financial markets will herald a recession.
With stock markets across the globe experiencing massive losses, some observers have predicted a global economic downturn is becoming more likely.
But others are keen to stress a slowdown in national economies does not necessarily mean a recession is around the corner.
In an effort to quell fears in Britain Ed Balls, Gordon Brown's number two at the Treasury during his ten years as chancellor, said the UK is in a good position to cope with such an uncertain situation.
"This is a big global event happening around the world - stock markets falling in Asia, in America," Mr Balls, now the schools secretary, told the Today programme.
"No country is going to be immune to that. The question is are you in a strong position to deal with these global events or are you in a weak position?
"I think like 2003 when we had big falls in the stock market and like 1998, here in Britain because we have got an independent Bank of England and because we have a low level of national debt, we are in a strong position to be able to deal with these global events, but of course we will be affected by them."
The UK's FTSE has this morning rallied after experiencing the biggest one-day fall since September 11th 2001 with a loss of 5.5 per cent yesterday.
Exchanges in other European nations and across Asia have also seen major falls over the last 24 hours, with many analysts keenly awaiting the opening of American markets this afternoon after a public holiday in the US yesterday.
The chief economist at High Frequency Economics, Carl Weinberg, believes it is inevitable that stocks will continue to lose value this year as the American economy slows down.
"If you did a survey of fund managers, the forecasts for profits on equities in the next year have been about 16 per cent or thereabouts," he told BBC Radio Five Live.
"When we do our calculations from the macroeconomic side, it looks like those estimates have the sign wrong and should have been talking about -15 per cent or -16 per cent."
An economic stimulus package announced by US president George Bush last Friday has been widely regarded as 'too little, too late', with investors wanting a faster drop in interest rates.