LONDON BRIEFING: The British chancellor first realised Britain was in trouble on the way home from the beach, writes Fiona Walsh

AMID THE avalanche of alarming news to emerge on the UK economy in recent days, one revelation stands out as the most extraordinary - and perhaps the most frightening - of all.

It wasn't chancellor Alistair Darling's gloomy description of UK economic conditions, in a now notorious interview with the Guardian newspaper last Saturday, as "the worst they've been in 60 years".

Or his warning that the downturn would be "more profound and long-lasting" than people thought.

Nor was it yesterday's grim forecast from the OECD that the UK will slide into recession this year.

No, the single most alarming revelation has been the chancellor's detailed recollection (also contained in the Guardian interview conducted at his holiday croft in Scotland) of the moment in the summer of 2007 that he first realised the country was in trouble.

The custodian of the British economy was on holiday last year in Majorca with his wife and their two teenage children. Darling's quotes are worth repeating in full: "I remember I picked up the FT in the supermarket, as you do, and it had the European Central Bank starting to put money into the economy.

"I phoned the office to ask why they were doing quite so much. It didn't surprise me that money was going in - there was concern going around - but it was the sheer scale of it. I said: 'what about our institutions?' This was when Northern Rock started to figure."

The media may have embarked on a feeding frenzy this week over Darling's "worst in 60 years" comments, but in the City, it was the matter-of-fact disclosure of how he first heard of the looming crisis - not in an urgent phone call the previous day from the Bank of England or the treasury but from a news stand in a Spanish supermarket.

Presumably, had Darling decided to stay at the beach that day he would have been out of the loop even longer. Such insights can only add to the growing belief that Gordon Brown's government has simply lost the plot.

And if the prime minister seriously believed that his much-trailed measures to help first-time buyers, announced yesterday, would do anything to dispel that belief - or to inject life back into the moribund UK housing market - he was sorely mistaken.

The centrepiece of his package to revitalise the market is a temporary increase of £50,000 in the stamp duty threshold on home purchases, taking it to £175,000.

This may be welcome news in some parts of the country, such as the northeast, the midlands and Wales, where houses and apartments can still be bought for such a figure, but it will be virtually useless in London and the southeast where £175,000 would barely buy you a bedsit even after the price falls of recent months.

While official government figures put the cost of the average home at just over £178,000, that figure spirals to little short of £350,000 in Greater London.

And for London's first-time buyers the average price paid is reckoned to be £260,000, way above the new stamp duty threshold.

Even those buyers who do benefit have little to celebrate - with most mortgage lenders now demanding a minimum deposit of 20 per cent of the value of the property, the saving will come in at £1,750, nowhere near enough to tempt reluctant first-time buyers into the sinking market.

The move was slammed by much of the industry as too little and too later.

And - a recurring theme with Brown - many fear that the changes have been rushed out in pursuit of favourable headlines rather than being thought through properly.

There were other moves yesterday aimed at helping new entrants into the housing market, including interest-free loans to couples earning less than £60,000 a year and measures to help stem the rising tide of repossessions.

These would see councils and social housing landlords take over mortgage debts of those who find themselves unable to meet payments and charge affordable rents instead.

These have been given a somewhat warmer reception than the stamp duty changes, but are unlikely to have much impact on the overall market.

Nor, from yesterday's reaction, are they likely to have much of an impact on his standing among voters - whether they own their own home or not.

• Fiona Walsh writes for the Guardian newspaper in London