The Bank of England (BoE) wants to improve the way it monitors UK credit conditions after admitting that the growing sophistication of the financial markets has made it more difficult to manage monetary policy.

The bank is struggling to determine the impact of the credit meltdown to the economy amid accusations that it failed to respond quickly enough to the crisis at Northern Rock.

Charles Bean, chief economist, said assessing conditions in the economy is ‘subject to considerable uncertainty’.

Writing in the bank’s quarterly bulletin, Bean said: ‘One important step in analysing monetary demand and supply stocks involves improving the bank’s information about credit conditions’.