The fall-out from the US sub-prime mortgage crisis and the near collapse of Northern Rock may have some way to run yet, Bank of England Monetary Policy Committee member David Blanchflower acknowledged today.
It was difficult to know how much more might emerge but he estimated losses revealed by banks to date were still some way off pundits' predictions of the likely total hit.
"There is still concern in the credit market," he noted. That meant more information was probably still to come out.
And he flatly refused to comment when asked whether he felt the BoE had "deserved the amount of stick it had got over Northern Rock".
Mr Blanchflower maintained that was not his role which was confined to interest rate decision-making.
Both the Bank, the Government and the Financial Services Authority have all come in for criticism over their handling of the affair.
Asked whether the feared economic slowdown following the worldwide economic troubles would mean a poor Christmas on the high street, he acknowledged some evidence of "softer" trading.
For example, Woolworths had said its third quarter had been not as good as its first two.
There appeared to be a decline in general footfall, but no sign that internet shopping was being affected.
But there was praise for the West Midlands.
Mr Blanchflower, on a visit to Birmingham and the Black Country yesterday, said the region appeared "confident".
He declared: "People are proud of what is going on here. Birmingham itself has been particularly strong."
And he confirmed comments he made late on Tuesday concerning migrant work-ers and their impact - many have come to the West Midlands in sectors like food processing and public transport.
Migrant workers had been a positive economic force in the UK, helping to increase the economic growth rate while at the same time keeping wage inflation low, said Mr Blanchflower.
Speaking before the House of Lord's Economic Affairs Committee, he highlighted how they were willing to take jobs UK citizens might not want and hardly ever claimed benefits, producing a "significantly positive" impact on the economy.
"I take the view that this flux of migrant workers has been raising the trend growth of the economy, holding back wage inflation pressures, and is beneficial in the short run."
The greater productivity of the migrant workers had been helping companies keep their prices low while also benefiting shareholders.
With regards to the labour market, Mr Blanchflower said migrant workers had made the workforce more flexible and more mobile.
"The economy is better able to match jobs with workers," he said.
He noted that migrant workers had not been displacing jobs, but rather picking up those that UK workers were not willing to take.
Mr Blanchflower said that during the past few years in the UK there had been a fear of unemployment despite good economic conditions.
This had helped keep wage inflation in check and could be due to the competition from more productive and motivated migrant workers, but also from the awareness that companies can move to low-cost countries.
And he added that the English language appeared to be a key factor in the decision of migrant workers to move, as both the UK and Ireland had seen a large influx of foreign workers from Eastern Europe, unlike Sweden, whose labour markets are just as open.
