Lord King has warned that a repeat of the chaos of the 2008-09 could be on the cards.
Former Bank of England governor Lord Mervyn King has warned that the UK must address its underlying economic problems or risk being "trapped in a period of great stagnation".
Speaking to Sky News Lord King (pictured) said the ongoing Brexit saga was leading the government to ignore the issues affecting the economy.
As such he suggested that the best thing to do nowwould be to have a general election and that the new government's Brexit strategy should be to "just do it".
Lord King said: "We're not looking at the underlying economic challenges for the UK.
"We have one of the lowest savings rates in the British economy of any country in the G20 save perhaps for Argentina.
"We're not saving enough to finance our pensions or care for the elderly, or to finance infrastructure.
"These are the big challenges. What do we do about the education of 50% of people who don't go to college or university? It's a great shame this issue [Brexit] has dragged on so long."
Lord King added that the recovery from the financial crisis was weaker than after the great depression.
He said: “Following the great inflation, the great stability and the great recession, we have entered the great stagnation."
Lord Kings claims come at a time when Brexit remains unresolved despite the Prime Minister having agreed a deal with the European Union.
However it has been claimed that exiting with a deal could still see the UK economy contract by 4% to 6%.
Speaking on the Sophy Ridge show Amber Rudd, the former work and pensions secretary, said: “Our government’s own assessments are that it will hurt the economy, I think, by 4% to 6% a year.
"So it’s serious stuff. But I still think that it’s [Brexit] the right thing to do, because we had the referendum in 2016, and there’s other steps we can take to try and mitigate that.”
When asked about the deal Lord King expressed his frustration at the lack of movement.
He said:"It's frustrating parliament can't make up its mind and hasn't been able to vote but let's hope they do. I think most people think that this has gone on for far too long and just have the view: just do it.
"These are the big challenges. What do we do about the education of 50% of people who don't go to college or university? It's a great shame this issue [Brexit] has dragged on so long."
