World leaders at the G20 summit failed to lift spirits on the financial markets today as economists dismissed their plans as meaningless.

Shares around the world were flat or slightly down as investors instead focused on the expectation that the world economy is still facing the ­biggest recession for decades.

The leaders, hosted in Washington by George W Bush, agreed on a number of steps to limit the damage but left it to individual countries to come up with their rescue packages.

Core to the G20 message was that governments should come up with ­fiscal stimulus measures such as tax cuts and spending increases to boost domestic demand in their countries.

In the UK, details will come in the Pre-Budget Report next Monday.

The CBI today forecast that the economy would contract by 1.7% in 2009 — the most since 1980s.
Julian Jessop, economist at Capital Economics, said: “This weekend's G20 summit failed to deliver any new stimulus measures to rescue the world economy from the current recession, but at least it avoided the knee-jerk responses such as rushed regulation that would have made things worse.” Vishnu Varathan, an economist at Forecast, said: “There were no measures, so there was nothing for the markets to grip on to.”
David Moore, of the Commonwealth Bank of Australia, said: “G20 leaders may have urged fast action to deal with the global financial crisis, but concern over the weakened international economic outlook still weighs heavily.”

Oil fell 36 cents to 53.88 a barrel in London as traders said the G20 had left no reason to assume global demand for oil products would improve.