Britain's economy could suffer  another period of contraction in 2011, the Bank of England's  executive director for markets Paul Fisher said in a newspaper  interview on Thursday.

"It's not impossible that we would see a quarter of  negative growth," Fisher, who is also a member of the Monetary  Policy Committee, told the Daily Telegraph.

"The... UK tends not to be that volatile quarter to  quarter but in this sort of situation when you are recovering  from a deep recession it is not impossible," he said.

Fisher was quoted as saying the recovery was on track but  that "at this stage of recovery in a cycle it's always going  to be bumpy."     

He told the newspaper the risk of deflation has  "diminished," adding the biggest risks to the British economy  were external.

Fisher did not rule out the possibility of restarting the central bank's 200 billion pound quantitative easing programme.

"I would say the chances are less than they were but it's  still not ruled out," he said. "It is most likely to be triggered if we have some sudden  shock or lurch in the economy that is unexpected. - Reuters