The economy may contract again for one quarter, but is unlikely to return to recession, Bank of England policymaker Kate Barker said in a newspaper interview published.

Ms Barker said the harsh winter weather hit retail sales at the start of this year but that February's business surveys had painted a more upbeat picture of the economy, in an interview that did not touch directly on the outlook for monetary policy. "I think lots of things were going on at the start of the year which makes it difficult.

"We had the VAT rise, where some people bought goods ahead of the increase, and we had the bad weather in the first part which, I'm sure, affected retail sales figures," she told Saturday's Western Morning News.

"It's possible we will have a quarter when GDP falls, but I don't think it will be a double dip. I would be surprised if we go back to recession but I think recovery will be bumpy and fragile."

The economy grew by 0.3 per cent in the final three months of last year after an 18-month recession that was the deepest in its post-war history. Recessions are usually defined as a period of at least two consecutive quarters of falling GDP.

Unexpectedly weak retail sales and trade and manufacturing figures for January have cast doubt on the strength of the recovery - though economists say that at least some of the weakness may have been due to transport disruption from the coldest winter in 30 years.

Ms Barker identified fiscal tightening by government and tight credit conditions for businesses as a brake on future recovery.

"We are talking about a protracted period where credit is more expensive while there is pain from the public finance side," she said.

Britain is set to run a record budget deficit this year and financial markets are likely to put intense pressure on the victor of national elections, expected in early May, to announce detailed plans to reduce annual borrowing.

Moreover, the BoE's decision to cut interest rates to 0.5 per cent and spend £200 billion of newly created money on buying up financial assets has only partly reversed the rise in corporate borrowing costs caused by the credit crunch.

Most economists do not expect the BoE to start to tighten monetary policy before the end of the year because of ongoing economic weakness, and Ms Barker said that firms would have to get used to higher credit costs than before the downturn . "It will be a different world in the sense we are not expecting credit to be as easy as it was before the crisis for a considerable time," Ms Barker said. "Some people say never - I think it's rash to say never, but for the foreseeable future it will be this way."

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