Since its programme of Quantitative Easing (QE) began in March 2009, the Bank of England has injected around £200bn into the economy.

During the same period, the FTSE 100 index has grown by more than 58%, from 3,542 at its low point in March last year to 5,613 at the time of writing.

City analysts now fear that QE has created an artificial bubble in asset prices that will end painfully once the stimulus is removed, potentially pushing the UK back into recession.

The Bank of England's executive director and chief economist Spencer Dale said that QE had contributed "substantially" to the FTSE's surge, as well as to significant gains in corporate bond prices.

The latest fears about the precarious nature of the recovery and the reaction to the removal of QE come as chancellor Alistair Darling prepares for Labour's final pre-election Budget, on 24 March.

Darling has reaffirmed his commitment to halve the budget deficit over the next four years after revealing that there would be no new spending cuts announced in the Budget.

However, shadow chancellor George Osborne has challenged Darling to put "his country before his party", claiming that the Prime Minister was being "dishonest" about the need for urgent spending cuts.

Speaking to the BBC, Osborne said: "The Budget can't conceal this central fact – that the country has run out of money.

"Whoever forms the next government is going to have to take some difficult decisions about spending [and the chancellor] should be upfront about the nature of those decisions."

See printweek.com for live coverage of next week's Budget announcement.