Mr Blanchflower, who is based in the US and has had to travel to Britain to attend monthly committee meetings, will be succeeded by David Miles, former adviser to Gordon Brown, and an influential academic economist at Imperial College London.

Known for his dovish attitude towards monetary policy, Mr Blanchflower frequently pushed for bigger rate cuts than his peers, foreseeing the approaching economic downturn to a fuller extent.

Currently serving as chief executive of Morgan Stanley, Mr Miles led the 2003 government review of the mortgage market, and has long been expected to take a Bank of England MPC seat, according to The Times.

His other recent role as a non-executive director of the Financial Services Authority, however, is expected to cause some controversy, as many are shining the spotlight of blame at the FSA for failing to regulate the banks sufficiently as they lent themselves into a credit crisis.

Mr Miles, appointed to the post by the Chancellor Alistair Darling, takes up the position on June 1, but the MPC will soon have to fill another chair on the committee as Tim Besley has also announced that he will be leaving, at the end of August.

In contrast to his fellow departing MPC member, Mr Besley has been known for his hawkish attitude to interest rates policy, voting for higher rates to dampen rising inflation last year while Mr Blanchflower sat at the opposite end of the spectrum.

“I am delighted that David Miles has agreed to join the monetary policy committee,” Mr Darling told MPs on the cross-party Treasury select committee, the Guardian has reported.

“His considerable experience analysing the interaction between financial markets and the economy will be extremely valuable to the committee.”

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