The UK economy is now “bumping along the bottom” and may even start to strengthen later this year, according to the deputy governor of the Bank of England.

Charlie Bean was in the West Midlands talking to businesses about the Bank’s policy of quantitative easing. Currently this involves printing £125 billion to buy up financial assets in order to try and stimulate the economy.

Mr Bean said the Bank of England would assess the progress of the scheme so far when its Monetary Policy Committee meets in August.

But he warned that, like changes in interest rates, it could take nine months before the affects worked their way into the economy “and about the same again before really affecting inflation”.

And he said the Bank would probably wait until it was in a position to increase interest rates before looking at any sale of the assets bought under quantitative easing.

Any decision on withdrawing any of the economic stimulus measures would depend on the medium-term prospects for inflation, which the Bank would continue to try to hold at around two per cent.

Mr Bean discounted predictions about the possible shape of the recession, but said: “I would think it reasonable to see some slight resumption in expansion in the back half of this year. It might not be particularly strong, but that depends as much on whether optimism starts coming back and we see growth start to strengthen. And time will tell how strong it is.

“We think the economy has stopped contracting, and we are bumping along the bottom, but precisely where we are, and the strenght of any pick-up, is still unclear.”

Mr Bean said the economy was also starting to see the impact on exports of the one fifth fall in the value of sterling.