MPC member warns of recession risk

"I think it would be foolish to say that there's no risk of that," Mr Weale told the Times, noting that the Bank's latest economic forecasts put "a significant chance on the economy contracting over a four-quarter period".

Weale, who voted with the majority to keep monetary policy ultra loose in his first Monetary Policy Committee meeting this month, also said he did not think there was a substantial risk of inflation spiralling out of control.

"I find it easier to see why growth should come in a bit below (the forecast) than I do to see why inflation should come in above the forecast," he said.

Britain's economy emerged from an 18-month recession at the end of 2009 and has surprised with robust growth since then. However, tight credit, government spending cuts and weak consumer confidence have been cited as serious risks to the recovery.

His comments, which helped push sterling to a one-month low against the dollar, suggest a dovish streak, although the economist said he could see arguments for "both tightening and loosening" monetary policy.

This month, the MPC voted 8-1 to keep interest rates at a record low of 0.5 per cent and to maintain the central bank's 200bn asset purchase programme. Andrew Sentance voted for a 25 basis point rise in rates.

The Committee discussed arguments for tightening and loosening policy before voting in favour of the freeze, with Sentance arguing there was a risk that recent, surprisingly strong inflation could become entrenched.

Weale played down that risk. Most of the MPC agree that one-off factors have driven up inflation this year and argue price pressures will wane over the next year or so.

"I am very comfortable with the view that there is slack in the economy, that unemployment is likely to rise further, and the way things are developing I find it hard to see that there are unusually substantial risks to inflation," he said.

He added dangers ahead include a renewed hike in unemployment as well as declining house prices.