The Bank of England is as "hard-nosed" as ever about hitting the Government's inflation target, its chief economist would have said in Kent last month if snow had not cancelled his visit.

Spencer Dale, a member of the interest-rate setting Monetary Policy Committee (MPC), was due to have been guest speaker at the Kent Business School 21st anniversary dinner at the University of Kent in Canterbury.

In a transcript of his speech, he said that missing the two per cent inflation target in most of the last 48 months had suggested to some that the bank had "gone soft" on inflation.

But this was simply untrue. He blamed price shocks in energy and other commodity prices, Vat and the falling value of sterling for offsetting a "downward drag on headline inflation".

"My single most important message to you is that the MPC remains as hard-nosed as ever in its determination to hit the inflation target. That is the remit given to us by government and for which we are accountable to parliament and the public."

Banks were still not lending normally and while they had strengthened their funding and capital position, progress varied from sector to sector. For small businesses, which relied more heavily on bank finance, it remained "glacial".

Mr Dale said the economy was slowly recovering but there was still a long way to go. The depth of the recession meant that output and employment were likely to remain below what "felt normal" for a considerable time. His final two words would have been: "Happy birthday".