by business editor Trevor Sturgess

The economy is "bumping along the bottom", according to a senior Bank of England official.

Charlie Bean - deputy governor and a member of the interest rate-setting Monetary Policy Committee - told KentOnline that recent surveys suggested things were picking up.

He said: "Obviously there's been a very sharp contraction in activity, particularly in manufacturing, during the last quarter of last year and the first quarter of this year but business surveys have picked up quite noticeably in the past few months and they suggest activity is just about flat.

"There are differences across sectors and individual firms but the broad picture looks like we’re probably around about the bottom.The big unknown is how strong the recovery is going to be and how long we’re going to have to wait for it.

"It looks as if we’re pretty much bumping along the bottom."

Mr Bean was in Kent as part of a national fact-finding tour, meeting businesses and accountants, and testing the local economic temperature.

He said that quantitative easing (QE) - the Bank’s injection of £125billion into the economy by buying up government and corporate assets - would take some time to take effect. It aims to stimulate growth in spending to past levels.

"We want to get it up to the sort of rates we saw in the preceding decade or so and that would be consistent with the economy operating at a decent rate and us meeting our inflation target," he said.

"It will take time for the effect of QE to percolate through to the economy. Our take is that the current signals are moderately encouraging."

The ripple effect could impact on interest rates to consumers. "But there is still quite a long way to go," he added.

The chancellor has approved QE of up to £150billion. "If we want to go above £150billion, the Governor would write to the Chancellor to seek his permission and I don't see why the Chancellor shouldn’t provide that - but that’s up to him.

"As to whether we will or not, that’s a decision we will take at our August meeting."

Mr Bean also said low interest rates could be held well into next year - but that depends on how the economy evolves over the next few months.

The MPC cut base rate to 0.5 per cent earlier in the year, the lowest it has been since the Bank was founded in 1694.

He said that the Bank was hoping to see signs of recovery "as we go into the back half of next year". But he did not expect a sharp recovery, more a "moderate pick-up in growth".

"What we hope is that this period of unusally low interest rates will not need to last for too long," he said. "As soon as the economy appears to be on the mend and the recovery is established, we will have to think about withdrawing the extraordinary stimulus that we’ve injected and interest rates will rise to more normal levels.

"Everything hinges on how the economy evolves. We don’t have a specific timeframe."

But he added: "If there was very sharp bounceback in the economy and we were agreeably surprised with a very strong recovery, then we might be tightening policy rather earlier. If the recovery is a long time coming then policy will stay loose for some time."

Mr Bean said he had sympathised with savers who faced falling income from investments. "I have every sympathy with savers because after all they are not the people who caused this crisis, but it is far better that we take aggressive action now to try and get the economy back on an even keel, limit the rise in unemployment, limit the number of business bankruptcies and the like.

"If we didn’t do that, then what we would find ourselves faced with is a much longer period of depressed activity in the economy and inevitably we would have to keep interest rates low for even longer."