Bank of England policymaker Adam Posen said on Thursday his decision to stop voting for more quantitative easing was due to signs that Britain's economy was picking up, as well as mixed news on inflation.
Posen had been a flag-bearer for more economic stimulus, and on Wednesday financial markets all but ruled out the possibility of more QE next month after minutes of the BoE's April policy meeting showed he did not support further asset purchases.
Until then, signs that tensions in euro zone debt markets were increasing, as well as weak official data on British factory and construction output, had caused some economists to predict that further QE was becoming more likely, not less.
Posen, in a blog for the Independent newspaper and an interview with its regional sister paper the London Evening Standard, said his change of view should not have been a surprise.
The latest data convinced me that for now an additional 25 billion pounds ($40 billion)(of QE) could be unnecessary, he wrote on the Independent's website.
By the latest data, I do not mean one month's outturn on the headline CPI, however disappointing. What I mean is ... that underlying growth is picking up - that is, that QE and the British economy are responding as I expected it would - with the mixed indicators on inflation.
British consumer price inflation rose for the first time in six months in March, increasing to 3.5 percent from 3.4 percent, in contrast to BoE forecasts in February that it would fall steadily this year below its 2 percent target.
After this data came out on Tuesday, Posen told reporters that the BoE would have to rethink its approach if there was no fall in core inflation - which excludes volatile food and energy prices. He reiterated this point on Thursday.
Posen also said that he stood by his promise in March last year not to seek another three-year term on the BoE Monetary Policy Committee if his inflation analysis proved to be wrong - though he said he should not be held to a forecast of 1.5 percent inflation for summer 2012.
That was when some MPC members were voting to tighten policy and no one else was voting for additional ease. Of course, the inflation forecast is higher now than it was then precisely because, rightly, we did more QE, he said.
What is more challenging to my analysis, and more concerning for the economy, is that core inflation has plateaued for the last three months rather than trending down.
Posen's term on the MPC ends in August, and in March he said that he would decide this month whether to seek another term.
($1 = 0.6226 British pounds)
(Reporting by Fiona Shaikh and David Milliken; Editing by Ruth Pitchford)