New Bank of England monetary policy committee member David Miles yesterday dismissed the prospects of strong growth in the UK in the near term, in comments that could be viewed as a challenge to government forecasts.

New Bank of England monetary policy committee member David Miles yesterday dismissed the prospects of strong growth in the UK in the near term, in comments that could be viewed as a challenge to government forecasts.

Miles told the Treasury Committee of backbench MPs that he believed the UK could experience a V-shaped recession with a sharp rebound in growth, but he cast doubt on the prospect of a period of rapid economic expansion.

"It may be that we get what looks like a very sharp rebound over the next few quarters: one might interpret that as a V-shape but that doesn't really tell you an awful lot about what the likely path of GDP growth will be."

He added: "I remain of the view that while a return to growth does seem plausible, and monetary policy is having traction in the economy, the idea that we'll return to rapid growth and that there'll be a sustained return to growth above the long-run trend of 2% to 2.5% seems fairly unlikely."

Miles's comments came just days after official figures were amended to record a 2.4% contraction in the economy in the first quarter of the year, the worst since 1958.

His analysis also cast some doubt on Treasury predictions that the country will return to economic growth later this year and surge to above-trend growth of 3.5% a year by 2011.

Miles said: "There is a real issue about availability of credit.

Frankly, the banking system in the UK is on life support.

"I think it is unrealistic to expect the availability of bank lending to increase very dramatically. That is one of the reasons why a quick return to rapid growth seems a pretty unlikely scenario to me."

The committee endorsed the appointment of Miles, former chief UK economist at investment bank Morgan Stanley, but raised doubts about his continued service as a non-executive director of the Financial Services Authority.

Committee chairman John McFall said: "There is an existing formal statutory link between the FSA and the Bank of England at deputy-governor level, so this is a departure from this arrangement.

"The committee has therefore recommended that both institutions should consider the potential conflicts and benefits which might arise and report back to the Treasury Committee before the next monetary policy committee meeting."