The Bank of England’s Monetary Policy Committee might well plump for more money printing on Thursday.

But, if the committee were to back further asset purchases, would it do any good?

The Bank’s view is that the first £200bn-worth of quantitative easing boosted growth by between 1.5 per cent and 2 per cent. It expects the second round of asset purchases to have a similar effect.

Not everyone buys the MPC’s line, including the former Bank economists at Fathom Consulting, who argued today that Threadneedle Street has misdiagnosed the problem befalling the UK economy.

Rather than spur growth, Fathom argues that further gilt purchases would merely stoke inflation, eroding the Bank’s credibility in the process.

For Fathom, more QE would represent a repeat of the mistakes seen in the 1970s, where the misdiagnosis of the UK’s economic ills led to a series of policy errors, the result of which was years of high inflation and low growth. Read more