Global debt has hit a record high of $152 trillion, weighing down economic growth and adding to risks that recovery could turn into stagnation or even recession, the International Monetary Fund has warned.

In a worst-case scenario the IMF also fears that a wave of populist politics across the US and Europe could send globalisation into reverse with protectionist policies hitting international trade, investment and migration, sending the world plunging into a prolonged period of stagnation.

The warning came after the IMF cut its growth forecasts for a series of countries around the world, leaving Britain the fastest growing economy in the G7.

It is urging governments to help troubled banks in the worst-affected parts of Europe, spend more money on boosting economic growth where possible, and reform economies to increase GDP – as well as pushing to keep borders as open as possible.