The credit crunch is proving to be a much more 'serious and durable shock' than was expected when it began a year ago, Kate Barker, a member of the Bank of England’s monetary policy committee, said yesterday.

The MPC will have to look at the impact on the wider economy in the months ahead, Barker said in a speech to the North West Chief Executives Club.

But she also defended the committee’s approach to curbing inflation, commenting that the economy was not yet out of the woods on that front. She further conceded that access to credit for some household and corporate borrowers was becoming more restricted and expensive.

Financial Times