Bank of England dove Posen to quit for post in America

The Bank of England dove Adam Posen is to quit the rate-setting Monetary Policy Committee to take the helm of the Peterson Institute, a US think-tank.

Mr Posen, the only member of the MPC who has voted consistently for more stimulus in recent years, will step down when his current term on the MPC expires in August.

He yesterday admitted that he may have been over-hasty in dropping his call on the Bank to pump billions more into the economy last month. Mr Posen surprised the markets in April when he abandoned his push for an extra £25bn stimulus. But he now says the recovery is weaker than he thought, while the last £125bn round of QE in October, in response to the eurozone turmoil, has had less impact.

"I had been hopeful in the last few months that after we did an additional £125bn that was getting close to enough. And now I am debating whether I was premature to think that," Mr Posen said.

A month ago Mr Posen insisted that the economy was performing more strongly than official figures suggested. Yesterday he said: "My past assessment that the weak data was likely overstating the weakness of the economy may have to be discounted somewhat.

"I still think the weak data somewhat overstates it, but given the revisions to the construction data, given the downward moves in the business surveys ... it's not just data, the underlying strength of the economy is weaker."