CHARLES BEAN, executive director of the Bank of England, declared business leaders are uncertain about the future direction of economy in Yorkshire, after a meeting at The Grange Hotel, York.

Mr Bean, who is a member of the bank's all-powerful Monetary Policy committee, which recently cut interest rates by a quarter of one per cent, was on a fact-finding lunch in the city yesterday organised by the Yorkshire and Humber Agency and the York and North Yorkshire Chamber of Commerce.

He was there to gauge how his audience - mostly members of the regional chamber - viewed the present and future.

He said: "Sometimes when I come on these visits I get a quick signal, but clearly the local economy here - in the same way as the general economy - has slowed down over the last few quarters.

"But the messages were mixed. Some were suggesting optimism as they moved towards the second half of this year; others were more off-beat.

"Not that the bottom has fallen out of the economy, but it seems 'soggier' than a year ago and there is a degree of uncertainty going forward."

Asked about reports that inflation was now running at an eight-month high at 2.3 per cent, largely because of a sharp rise in petrol prices, Mr Bean said there was little that could be done in the short term. The key issue was whether oil prices would stabilise and if not whether the increases would impact on consumer price inflation.

Another key issue was "whether higher inflation means higher wage rises or costs," he said.

Updated: 12:52 Friday, August 19, 2005