A MEMBER of the Bank of England's influential Monetary Policy Committee returned to the capital this week after a fact-finding mission to the North-East.

But while Kate Barker will take back to the Bank first-hand some of the hopes and fears gleaned from the business leaders on Teesside, she was unable to offer hard-pressed manufacturers and squeezed service sector bosses much succour.

Ms Barker said it had not surprised her to hear of the woes suffered by two prominent North-East manufacturers.

While she conceded that the region suffered disproportionately from exchange-rate and sales pressures afflicting the manufacturing sector, she stuck to the Bank's mantra that interest rates have to be set to best protect the health of the economy as a whole.

Referring to the North-East, she said: "People are having a difficult time, but there is a sense of realism and that things aren't uniformly terrible."

The economic despondency that swept the globe after September 11 was lifting more quickly than had been expected, she said, and while the international recovery was coming, and bringing with it a modest increase in volumes for exporting manufacturers, the lift was not that strong.

And Ms Barker cautioned that price pressures caused by the strong pound - an issue repeatedly bemoaned by major North-East exporters such as Nissan - would continue to pose problems.

"I don't want to sound too encouraging. I think things are going to get a bit better, they are not going to get a lot better," she warned.

One major concern she picked up from regional bosses centred on skill shortages.