Savers and pensioners are being let down by the Bank of England’s quantitative easing programme (QE), last night boosted to £275 billion.

Philip Rush, contributing economist at Nomura Global Economics said: “Predominantly it’s expected to have an inflationary effect, which is not something that is welcomed by pensioners and savers.”

British savers smashed a huge papier-mâché pig outside the Bank of England on Thursday in protest at the bank’s decision to launch an asset-buying drive that they fear will boost inflation and erode their savings.

Supporters of the “Save our Savers” campaign responsible for the giant pig believe the Bank’s decision will deal yet another blow to savers, who are squeezed by ultra-low interest rates and already high inflation.

“This is the worst news we could have possibly hoped for — it’s appalling,” co-founder of the campaign, Simon Rose, said at the demonstration.

Philip Rush pointed out although inflation will erode the real values of any savings it also favourably erodes the real values of debts. While the Bank is hopeful the effect of QE will trickle down to small businesses he warns that the trouble is there’s “not much difference between investing in a risky government bond and a risky loan to a small business”.

In the end, he says, private sector assets are much more likely to benefit than anyone else. Andrew Cave of the Federation of Small Businesses (FSB) meanwhile is hopeful that this latest round of QE could prove a positive development for small businesses, as one of main problems small businesses face at the moment is getting liquidity flowing.

A far better programme according to Mr Rush would be one of credit easing. Credit easing involves issuing gilts through government bonds rather than through the bank of England printing money, so it has the huge advantage of not creating money out of thin air, which the Bank is doing through its quantitative easing. This means that unlike quantitative easing, credit easing has no inflationary effect.

While the Bank of England has made it clear it would be unwilling to go onboard with such a programme, George Osborne announced at the Conservative Party Conference the Treasury will.

Mr Osborne is to announce more on the 29th of November when the government’s Growth Strategy is published. “Depending on how it’s adjusted, it could prove to be a successful move,” said Mr Rush.