“The mood is sombre,” he said in an interview. “The policy challenges are actually bigger than people make out.

"[The term] structural reforms is used much too often, but what is happening is that conventional policies, in particular monetary and fiscal policies, these aren’t working well.

Mr Basu urged co-ordinated action to tackle the slowdown.

However, he added: “I don’t quite see an obvious solution, so it may be a world where it takes some time to recover.”

He warned that inequality could start to rise as advances in technology push down wages and lead to workers getting a smaller slice of the income pie.