An increasing number of politicians and policy makers are talking about the worst of this crisis being over, and there being evidence of the beginnings of recovery.

Whilst stock markets have seen an impressive rally from the lows over the past six weeks, a lot of influential commentators including the likes to George Soros have been labeling it as a bear market rally. Encouragingly there has been some stabilization at the new levels, but It is surely a little early to be talking about a full blown recovery. It may be fair to say that the alarming pace of decline of global economies has begun to ease, but the trend still remains a downward one.

Today the budget released in the UK revealed what it seems alot of people seem to have put to the back of their minds - all of this money that countries have put in to their ailing financial systems, and to try and stimulate their economies will have to be repaid at some point. The IMF estimated the total amount of money that the crisis will cost as much as £200bn. Bizarrely this was later revised down to £130bn allegedly after a heated conversation between the Chancellor and the IMF, but the fact remains that these are not insignificant amounts of money, and it will need to be found somehow.

Borrowing projections have spiraled upwards, whilst growth predictions are still being revised downwards. The latest figures released today showing the UK issuing £220bn of bonds to finance the budget deficit, which brings debt to GDP close to 78% which is more than some Emerging Market economies. The government has had to revise down its own GDP forecast from November and now predicts the economy to shrink 3.5% this year (at odds again with the IMF who predict 4.1%) whilst then inexplicably expecting to rebound to 1.25% next year. The majority of the market economists see this as incredibly optimistic and expect further downward revisions.

This crisis, whilst maybe past its peak, is only just beginning to play out the impact it will have on global economies for the next few years at least. How markets react to this reality checks remains to be seen, but it is hard to match current valuations with expectations.

Justin Gowen is a bond and derivative broker, having previously been a market maker at CS and HSBC with a total of 13 years as a market professional. He contributes regular articles to the popular business site KnowledgeBrief, and is on the advisory panel for the business guide BusinessBrief