LONDON (Reuters) - Bank of England policymaker Andrew Sentance said there were encouraging signs of a pick up in the UK and the global economy, but there was still a risk that another financial shock could derail the recovery.
In an interview with CNBC broadcast on Friday, Sentance also said he expected inflation to fall back to the central bank's 2 percent target, or possibly below it, helped by muted wage growth.
"I've been relatively encouraged by the turnaround we've seen in the last year, both in the UK and in the global economy," Sentance said.
"You have to recognise there is some risk of a double dip, but that's not the central forecast. You'd have to see some factors bring that about: we've seen big shocks in the international economy over the last couple of years, so you couldn't rule out some new shocks emerging on the financial front which could set back the economy," he added.
"But that's not my central expectation," he said.
Sentance also said he expected inflation, which hit a 14-month high of 3.5 percent in January, to fall back to target.
"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."
(Reporting by Jon Boyle and Fiona Shaikh)
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