Britain's economy has probably avoided another recession, Bank of England policymaker Martin Weale has said, although he warned the recovery would be choppy and that cash-strapped households would remain reluctant to spend.
Weale's comments in an interview with the Bath Chronicle newspaper published on Friday chimed with a renewed dip in consumer morale in February and soft bank lending figures.
Recent business surveys have indicated an improvement in the economy after it shrank in the final quarter of last year, and the government and the central bank are hoping that falling inflation will allow consumers to spend a bit more this year.
In the first quarter of this year things have been better than I'd anticipated. I think it's more likely than not that growth will be positive, Weale said.
He added that disruption due to the Queen's Jubilee celebrations and the Olympics would make it difficult to gauge the real underlying state of the economy this year.
Looking ahead ... the numbers, I'm sure, will jump around and it will be difficult to know what to make of them until we have a more stable picture late this year, and maybe not until the first quarter of next year, Weale said.
Over the medium term I do expect what I'd call normal economic growth to be resumed, but normal economic growth is very different to making up the ground we've lost over the past four years.
Britain has not fully recovered from a steep slump in 2008-2009 and recent weak production and retail figures have reignited fears that the economy contracted again in the first three months of 2012.
Data this week showed British retail sales suffered their biggest monthly fall in nine months in February, with January's figures also revised sharply downwards, dampening hopes that a consumer revival will boost the economy.
Weale said consumer spending - which accounts for over 60 percent of all expenditure in Britain - would remain weak overall, and noted that young people had been hit particularly hard by the economic downturn.
Highlighting the fragile recovery, the British Bankers' Association said that while mortgage approvals in Britain were 9 percent higher on the year in February, they fell compared to January.
And consumers remained wary of taking on new debt. Businesses and households continue to be cautious about their finances in the face of difficult economic times and this shows up in a reluctance to take on new credit, or where possible, seeking to pay back bank borrowing, the BBA said.
Britain's consumer mood took a turn for the worse again last month, falling from January's five-month high, though it held above the record lows seen in the final quarter of 2011, a survey from building society Nationwide showed.
But not all Britons are feeling the pinch to the same extent.
The country's biggest department store chain John Lewis has been outperforming the wider retail market thanks to its more affluent customers. On Friday it said last week's volume of trade was a March record as sunny weather, an earlier fall of Mother's Day and the launch of the new iPad encouraged shoppers to part with their cash.
(Additional reporting by David Milliken; Editing by Catherine Evans)