Economic stimulus should have boosted demand, Mr Miles said

There are signs the economy may already have started a recovery, according to an economist who is set to join the Bank of England's rate-setting body.

"The worst of the recession may well be behind us," David Miles, Morgan Stanley's chief UK economist, told the Western Mail newspaper.

"I'm less pessimistic than many of where the economy may be going,"

Tax cuts and lower interest rates, along with other initiatives, should by now have helped boost demand, he said.

Mr Miles is due to join the Bank of England's Monetary Policy Committee in June.

"Economic history teaches us that a combination of tax cuts, running large fiscal deficits, substantial cuts in interests rates and more quantitative easing is likely, with a certain time lag, to have a substantial impact on demand in the economy," Mr Miles told the paper.

"That's not a confident prediction but a judgment about what may be the case."