Desperate times call for bold measures. The Bank of England’s decision to launch a second round of quantitative easing to stimulate growth in the UK highlights the grave risks for financial markets as the economy teeters on the brink of a double-dip recession.

It leaves investors in a precarious position as they ponder whether to switch into growth assets, such as cyclical stocks, and sterling or opt for the safety of UK government bonds as they weigh up the Bank’s latest gamble of buying a further ￡75bn of gilts.

Robert Parkes, equity strategist at HSBC, says: “QE is one big monetary experiment and no one really knows what will happen or where the money will go. On top of that, there is the uncertainty surrounding the eurozone crisis and global growth that could overshadow everything.”