The possibility of a more aggressive programme of interest rate cuts was raised yesterday by one of the Bank of England's more hawkish advisers. The Independent

Speaking at the Institute for Fiscal Studies in London, Timothy Besley stressed the very difficult task facing the Bank's Monetary Policy Committee as it balances the decline in growth and confidence in the economy with continuing inflationary pressures from higher energy and food prices.

Besley, a professor at the London School of Economics, said that 'with credit conditions tightening, we might expect a significant reduction in consumption growth over the coming months... It seems like a fair judgement that a return to the conditions seen for secured lending in the first half of 2007 is not imminent'.

He also stated that the MPC would be 'forming a judgement on how conditions in financial markets are affecting the real economy.'