The International Monetary Fund has privately pressed the Bank of England to expand its quantitative easing programme and start buying frozen toxic debt off private investors.

The IMF used its latest visit to the UK last month to urge the Bank to consider buying up asset-backed securities. Although it made only passing reference to this in its public statement, it is understood that privately the IMF urged the Bank to consider buying asset-backed and possibly mortgage-backed securities.

The Bank is technically allowed to do so, under the terms of the remit it was granted by the Treasury, but has so far balked at doing so for fear, it is thought, of putting public money at risk.

Daily Telegraph