Kate Barker is an outgoing member of the Bank of England's Monetary Policy Committee (MPC). In her final speech before stepping down on May 31 after nearly nine years as an MPC member, Barker said it was not yet possible to be confident about the pace of economic recovery even though some of the "severe downside risks have diminished."
As a member of the Bank's rate-setting committee that steered the UK's monetary policy during the financial crisis, she admitted that she had "seriously" underestimated the scale of the risks involved, which "implied overrating the ability of monetary policy to offset this shock".
Credit conditions and continuing weakness in the world economy - particularly in the EU - remained particular concerns, she added.
Barker said she was unable to look back on her 13 years as a policymaker with "the degree of satisfaction I would have wished", and that more quantitative easing may not have a significant impact on the economy.
Her comments will re-ignite the debate over the Bank's slow reaction to the crisis-hit financial markets.
The retiring member also called on the MPC to be more transparent about its economic forecasts, adding that though its focus on consumer price inflation was appropriate, it should consider a longer view than the current two-year horizon.
