Growth in Britain looks well set, with the International Monetary Fund once again upgrading forecasts.

Output is projected to expand by 1.1 per cent this year and could be even stronger given buoyancy in the first half of the year.

In 2025, the expansion is expected to surge to 1.5 per cent. That is below trend but moving in the right direction after the shocks of the pandemic and Russia’s assault on Ukraine.

Nothing is guaranteed, and the last decade has shown that the greatest threat has come from unexpected shocks such as the liability-driven investment (LDI) crisis.

That erupted during the IMF’s annual meetings of two years ago following Liz Truss’s unaudited tax cutting budget.

The IMF’s global financial stability report warns that high levels of leverage, particularly among untrammelled non-bank players in finance, are among the biggest risks. 

It points to the volatility in equity markets in August of this year, when the yen carry trade – hedge funds borrowing in yen and investing in the US and elsewhere – imploded providing evidence of how quickly markets can spin out of control.

The common feature of recent crises is the unexpected. Predicting the source of the tremor is all but impossible.

But cracks in the system can be tackled, preventing relatively minor eruptions turning into an earthquake. Reducing debt levels, in both the public and private spheres, is a way of reducing the risk.

Now that Britain is finally escaping the nightmare of the cost-of-living crisis, the first duty of the authorities is to encourage growth. 

Traditionally, the IMF has been the guardian of fiscal probity and clearly is appalled by the build-up of global debt. It has prioritised so called ‘fiscal consolidation’ – technical speak for budget cuts above all else.

There is a caveat which Chancellor Rachel Reeves must bear in mind as she wields the meat cleaver in next week’s Budget. 

If she goes too far, raising taxes and scaring business and wealth creators witless, then she would place a fragile cyclical upturn in peril. 

If the economy were to be driven back into stagnation, it could lead to a doom loop of deteriorating revenues and higher welfare bills.

Interest rate setters at the Bank of England have a critical role to play. Inflation has been comprehensively put back in its box. 

The Bank is far too conservative in its decision making. The last best hope for expanding output as taxes surge is a determined effort to lower interest rates. Otherwise, economic expansion will wither on the vine.

Asian tilt

Activist investors often get their way eventually. Elliott Advisors helped to speed the split at pharma giant GSK, which saw consumer health arm Haleon spun off. 

On the other side of the world, HSBC’s newish chief executive Georges Elhedery has moved rapidly to stamp his authority on the bank by separating core Hong Kong, 

Chinese and Asia operations – where the bulk of profits are earned – from the UK and other commercial banking operations.

The reorganisation which creates two other separate division – one looking after global corporate and investment banking and the other wealth – simplifies the structure inherited from predecessor Noel Quinn. 

He did the heavy lifting by selling sprawling HSBC operations across the globe.

Where all this leaves near 8pc shareholder, Beijing-controlled Ping An, which lobbied for HSBC to do the splits, is unclear. Reshaping the group would make separation – taking HSBC right back to its Asian roots – easier. 

By so doing, however, it would sacrifice Bank of England regulation an obligation taken on when it bought Midland Bank in 1992.

In the light of China’s security clampdown on Hong Kong and the increasing authoritarianism of president Xi Jinping, the Bank of England’s imprimatur ought to be more valued than ever.