There are signs of progress in dealing with problems in the eurozone and the banking system and expectations of lower inflation, Charlie Bean said.

His comments came after the UK emerged from double-dip recession on Thursday, with figures showing the economy grew 1% in the third quarter, after nine months of negative growth.

Mr Bean cautioned against an over-optimistic response to last week's gross domestic product figures, pointing out a proportion of the growth was caused by one-off factors like the Olympics.

However, he said: "We do think there is reason for some optimism going forward. We have seen a big squeeze on households' real spending power: Commodity prices, oil prices have risen, obviously the increase in VAT as well.

"Going forward, that squeeze should not be so intense. Utility prices will be going up again this autumn and there will probably a spike in food prices because of the unusual weather but, generally speaking, real household incomes won't be squeezed by quite as much."