Dr Posen was speaking at a Barclays seminar in London last night with the topic of ‘Making the most of doing more’.

Dr Posen had previously called for more quantititative easing to be added to the programme but held off calling for further expansion during the April and May Committee meetings, leaving fellow member David Miles as its sole supporter.

Explaining his decision Dr Posen said: “My published votes for no change in the stock of asset purchases at the MPC meetings of April and May this year reflected my expectation that prior QE measures would be sufficient to give the British economy a good chance of returning to sustainable growth consistent with meeting the inflation target.

“I was too optimistic about the forces at work, including the impact of the LTROs (long term refinancing operations) in the euro areas, as well as perhaps about QE’s impact.”

He said that further asset purchases should focus on private sector assets, such as securitised bundles of bank loans, in order to improve the perception of risk.

“I believe that further asset purchases by central banks can improve the economic situation we are now in. I believe this is particularly true because a major source of our difficulties is an excessive perception of and aversion to risk on the part of the investors.

“I propose that further asset purchases by central banks should take the form of private sector securities for the time being. This will allow more direct targeting of financial sector dysfunctions, and greater impact liquidity preferring investors portfolios, thereby leading to greater impacts on confidence and on the real economy than a similar unit of QE on government bonds.”

Mr Posen will be leaving the Committee this September.