Summers’ harshest criticism was not for the US Federal Reserve though, which he rebuked last year for not raising interest rates sooner, but the British government and the Bank of England.

“It’s rare that I have seen so misguided a combination of policy and policy communications as the new Tory government delivered,” he told the conference.

Summers said the enormous energy subsidies, a commitment to a substantial increase in defence spending and major tax cuts had left markets alarmed about Britain’s fiscal health.

“And when you alarm the markets that badly, and you’re still working on your plan to un-alarm for more than a month, it’s not usually reassuring for the markets.”

The Bank of England was forced to intervene in the UK government bond market last month after the government’s spending announcements triggered an unprecedented sell-off, which threatened a pension scheme collapse.

Loading

“Dysfunction in this market, and the prospect of self-reinforcing ‘fire sale’ dynamics pose a material risk to UK financial stability,” the Bank of England said in a statement on Tuesday.

But Summers laid blame for this week’s financial chaos at the feet of the UK’s central bank, which reiterated that it would end its market intervention this week despite being forced to expand its emergency bond-buying overnight.

Summers says that, as with a military conflict, it’s a terrible idea to announce the deadline by which you will withdraw.

“The same principles apply to a last resort finance operation, where if you say - it’s all going to end at a certain point - you just encourage the speculators to wait until the moment when it is.”

The Business Briefing newsletter delivers major stories, exclusive coverage and expert opinion. Sign up to get it every weekday morning.