Future BoE MPC member says worst may be over for UK

The worst of Britain's recession may be over and there are early signs the Bank of England's quantitative easing programme may be working, according to Bank of England Monetary Policy Committee member-designate David Miles.

In an interview with the Western Mail newspaper, Miles said the BoE's rate cuts and asset purchase programme were helping to combat the economic downturn.

"Substantial cuts in interests rates and more quantitative easing is likely, with a certain time lag, to have a substantial impact on demand in the economy and it may well be that the worst of the recession may well be behind us," he said.

Britain is suffering its first recession since the early 1990s, but recent business surveys suggest the pace of decline may be starting to slow.

The central bank held interest rates at a record low of 0.5 percent this month and said it would press ahead with its 75 billion pound scheme to buy gilts and corporate debt to increase the money supply.

Miles, who has been chief UK economist for Morgan Stanley for several years and will replace David Blanchflower on the MPC in June, said initial signs of the impact of quantitative easing were "mildly encouraging".

"Again it's early days, but the early signs are that it is having an impact and the hope is this will have an impact on the cost of corporate debt and its availability, as the money flows through the system, making it easier for banks to lend."

"I'm less pessimistic than many of where the economy may be going."