Bank's Sentance sees some risk of double-dip

Sentance noted that a "substantial fiscal tightening" would be needed as the recovery gathered pace. In his speech on Thursday, he had said that monetary policy would be able to offset some of the pain of government spending cuts.

He expects inflation, which hit a 14-month high of 3.5 percent in January, to eventually fall back to target, although there were some puzzles why it had not responded more to the recession.

"We understand the reasons why that (the rise) is: it's partly to do with the pound and the impact that's had on prices," Sentence said, adding that oil prices were also having an effect.

"As those things begin to drop out of the calculation, some of the other things that been affected by the recession, such as wage growth, will bring inflation down to target and possibly below it."

(Editing by Jan Dahinten)