The Bank of England Monetary Policy Committee tends to be over-cautious, one of its leading members admitted in Birmingham last night.
Kate Barker's comments mirror criticism levelled at the MPC from frustrated manufacturers in the West Midlands anxious for a further interest rate cut.
They came as Chancellor Gordon Brown was urged by business leaders to use today's Budget to help the West Midlands develop a competitive and value added economy.
Speaking at CBI West Midlands Economic Dinner at Birmingham Botanical Gardens, Ms Barker said that with indications of a soft start to the year for the consumer, the most likely outcome was for a slightly slower pace of UK growth in 2006 than the MPC had previously thought.
She said: "In fact, over the twenty forecast rounds since I joined the MPC, we have identified a downside risk to the central projection for growth on fourteen occasions - and never identified an upside risk.
"Analysis of the MPC's forecasting record from February 1998 to May 2003 concluded that the mean projection, which includes any downward or upward risk, underpredicted GDP growth at the two-year horizon by an average of 0.3 per cent. So perhaps this suggests a tendency to be a little too cautious."
And she added: "This all adds up to a finely-balanced judgment for interest rates.
"Taking a forward-looking approach, if global inflation subsides in 2007 and UK output remains a little below trend, I believe there could be a greater risk of inflation being below target in around two years' time."
Albeit, in the short run, rises in utility bills would probably keep inflation a little above target.
And that meant further caution on interest rates - currently at 4.5 per cent.
She said: "Reducing the rate to a more stimulative level may risk sparking some second-round effects on wages.
"It is encouraging that these have so far not been much in evidence, and that inflation, excluding energy, has been subdued."
Yet it was too early to conclude that this lack of pay pressure would endure, and this week's Bank of England/NOP poll for individuals' inflation expectations had shown a rise.
Indeed the MPC's other bogey monster is on the rise.
Ms Barker noted: "The housing market has certainly been surprisingly strong over recent months, and at present most indicators suggest that this will continue."
And, while private new car registrations remained weak, "this may be a little misleading as consumers seek better value by purchasing 'nearlynew' cars which have been briefly in other uses such as the hire car market".
Meanwhile Mr Brown was accused by MPs of ignoring the threat of global warming.
The Commons Environ-mental Audit Committee issued a scathing report, denouncing the Treasury for "institutional inertia" in the face of scientific evidence of climate change.
The report adds to the pressure on Mr Brown who is expected to announce that fuel duties will be frozen for the fourth year running - a move that will infuriate environmentalists.
However he is likely to couple the announcement with an increase in road tax to around #200 for so-called gas-guzzling 4x4s - a change called for by the committee but not likely to go down well in the West Midlands, home to Land Rover.
The MPs said Mr Brown needed to be much bolder, overhauling air passenger duty in order to "restrain" demand for more flights and establishing a "green tax commission" to promote environmental taxation. n The number of homeowners living in detached houses whose estates will be liable for inheritance tax when they die has more than doubled during the past five years, research showed today.
Only 13 per cent of detached homes were valued at more than the inheritance tax threshold of #234,000 in 2001/2002, but an estimated 29 per cent will be above the current threshold of #285,000 during the coming tax year, according to Halifax.
