On Thursday the Office for National Statistics will release its estimate of the GDP figures for the last three months.

They could show that the UK has slipped into an unprecedented triple-dip recession on the back of falling North Sea oil output and poor manufacturing and construction figures. On the same day the latest public borrowing figures could even demonstrate that despite the prevalent bitter taste of austerity, Government borrowing is actually increasing.

The margins between positive and negative are vanishingly small. The person in the street cannot distinguish between an economy growing at 0.1% and one shrinking by the same measure, so the figures are more important politically and psychologically than economically.

The same applies to the loss of the UK's AAA credit rating, which Chancellor George Osborne used to flaunt like a virility symbol. The loss of AAA made little difference to the borrowing costs of France and the US.

Even last week's veiled criticism of Mr Osborne's rigid anti-austerity strategy from the International Monetary Fund, the body oft quoted as proof that he was on the right track, is largely immaterial because the UK is not trying to borrow from it.

However, what does matter is that the British economy is stuck in a trough. Meanwhile the eurozone lurches from one crisis to the next, the US will be lucky to hit 2% growth and even in China growth is slowing. At home too, a lack of confidence is dampening demand and hampering recovery. According to research by the Halifax only a small minority feel better off than a year ago, while half feel worse off. Among those in their 50s the figure is 60%.

We cannot carry on like this. The Government's Funding for Lending scheme has shown limited success in the housing market, with mortgage lending up sharply month-on-month, especially for first-time buyers. But it has so far not generated significant borrowing to small and medium-sized companies (SMEs), a point picked up by the IMF.

Britain's banks have gone from being risk-blind to risk-allergic. Six years ago they were scattering credit like cherry blossom in a spring gale. Today companies are made to jump through so many hoops that good businesses have sound proposals that go unfunded, with negative knock-on effects on job creation and tax revenue. In February business lending actually fell.

The Government is set to announce an extension of Funding for Lending to cover specialist institutions such as asset-based lenders and leasing firms. Like all the Government's previous efforts to stimulate demand, it is too little too late. UK debt in not unaffordable. It has rarely ever been cheaper to service. (The US and Germany have similar debt to GDP ratios.) That should be an argument for launching a huge social housing building programme to tackle the current crisis. And it should mean getting money into SMEs through regional investment banks. If the economy starts motoring again, the debt will take care of itself.