The Bank of England’s monetary policy committee would be considering even deeper cuts in interest rates were it not for worrying signs that inflation is likely to spike soon and stay high this year, a key member of the committee said last night. Financial Times, The Independent

In remarks about the economy that appeared even gloomier than those by Bank governor Mervyn King last week, Kate Barker warned that the benign economic conditions that have characterised the past decade are coming to an end.

The risks, particularly the implications of weaker property prices for the banking sector, could easily justify further monetary stimulus, she said.