Retail sales rose last month and house prices fell at their slowest rate in two years, two surveys showed yesterday in more signs the economy may be bottoming out after the worst downturn in decades.
But policymakers remain wary of declaring victory too soon and are still mulling over whether to expand the bank's £125 billion asset-buying programme to boost the economy.
Bank deputy governor Charles Bean said in a series of interviews this week that it was still early days for quantitative easing and suggested the central bank was nowhere near withdrawing the huge stimulus it is putting into the economy. "We don't want to move too early, because we end up nipping a recovery in the bud and if you look at the Japanese example they tightened prematurely and it pushed the economy back into a downturn," Mr Bean was quoted as saying in the Yorkshire Post regional newspaper yesterday.
Still, the latest surveys from the British Retail Consortium and Royal Institution of Chartered Surveyors will reinforce expectations that things are at least not getting any worse.
The BRC said like-for-like retail sales rose 1.4 per cent last month compared with a year ago after a 0.8 per cent drop in May as very hot weather boosted purchases of summer goods.
Total sales, which include new floorspace, were up 3.2 per cent on the year, having risen just 0.8 per cent in May.
"The heatwave helped food retailers and got customers buying outdoor goods," said BRC director general Stephen Robertson.
The housing market was also looking a little better. The RICS house price balance rose to -18.1 in the three months to June, its best reading since September 2007, from -43.8 in May.
New buyer enquiries increased for an eighth consecutive month and at their fastest rate since the survey began in 1999. At the same time, there were fewer homes being put up for sale.
The tightening in market conditions meant more surveyors now expect prices to rise over the next three months than expect them to fall.
"The June survey provides more evidence that activity in the housing market is recovering, albeit from historic lows," RICS said.
The findings echo other recent indicators in suggesting record-low interest rates may be helping stabilise the housing market after price falls of around 20 per cent over the past year.
However, there are still many obstacles on the horizon. Unemployment is rising and fixed mortgage rates leapt sharply last month as lenders braced for the likelihood of higher interest rates ahead.
While monetary policy - interest rates are at a record low of 0.5 per cent - is likely to remain ultra-loose for a while, policymakers are conscious that there will come a point when it will have to be tightened, perhaps quite quickly.
"We won't want to leave it too long because it may let the inflationary cat out of the bag which would require us to tighten policy excessively thereafter," Mr Bean was quoted as saying.