Speaking to the Observer, Cable (pictured) was asked if Britain’s economy might endure a ‘lost decade’, and he admitted it could. “There is a real worry about [that], a real risk of that,” he said. 

Questioned on whether the UK could fall back into recession, he said: “Well, there is certainly a risk. I always try not to get drawn into forecasting arguments [but] there clearly is a risk. The most likely outcome is that we continue bumping along the bottom.”

His comments come as Treasury chief secretary Danny Alexander said the UK is not heading towards a triple-dip recession.

Alexander said while he accepts the Office for Budget Responsibility (OBR) forecast that the economy is set to shrink in the final three months of the year, 2013 will see steady growth and the country will avoid another recession.

The BBC reports Alexander said the road to economic recovery will be “longer and harder” than expected, but progress had been made.

Speaking on the Andrew Marr Show, he said: “The OBR forecast that the final quarter of this year would be negative, but that we would see positive growth slowly returning in every quarter of next year.

“That would suggest that we are not going to have that happening. But it is an uncertain world out there.

“We are seeing continuing problems in the eurozone, but I am happy to rest on the OBR’s forecast, which is a bounce-back from the Olympic boost we saw in the third quarter causing a small negative in the final quarter of this year, but then steady growth slowly starting to return next year and the year after that.”