Bank of England policymakers may opt to inject a further £50bn of stimulus into Britain’s ailing economy this week, according to leading economists.

Worsening economic prospects could force the hand of the Bank’s Monetary Policy Committee, which last month voted to pause its purchase of government bonds after pumping £325bn into the market through quantitative easing.

Since then however, the data have painted a picture of a worsening, not improving outlook for the British economy, and there is no sign of a solution to the eurozone crisis.

The Office for National Statistics said the recession that began in the first quarter was deeper than it initially thought, with the economy shrinking by 0.3pc in the first three months of the year and not 0.2pc as it previously estimated.

Then on Friday the Markit/CIPS manufacturing PMI showed the sector shrank at the fastest pace in three years in May, suggesting manufacturing will be a drag on the wider economy in the second quarter.

George Buckley, economist at Deutsche Bank, said the grim manufacturing PMI survey was "a game changer".

"Up until now we had been arguing the Bank would sanction no more QE after ending the previous programme last month. But conditions have worsened."

"The MPC cannot ignore this weaker news and we have thus changed our call for £50bn more quantitative easing to be announced at the June 7 policy meeting," he said.

Michael Saunders of Citigroup was of the same view.

“On balance, we forecast the MPC will expand QE by another £50bn at the June meeting,” he said.

“A delay in expanding QE might give the mistaken impression that the MPC believe they have little or no scope to ease further and are “keeping their powder dry” in order to use the remaining QE if the situation gets even worse.”

The MPC has left the door to more bond purchases wide open, and Citigroup is forecasting a total of £500bn of QE over time.

Howard Archer, chief UK economist at IHS Global Insight said an increase on Thursday was possible.

“We suspect that it will not take much more bad news on the growth front for the MPC to pull the QE trigger again and the dismal May manufacturing purchasing managers’ survey has provided a significant prod,” he said.

If a closely watched survey of the important services sector released hours before MPC members make their decision this week shows a contraction, it could prompt the Bank to fire up its money printing presses again.

Simon Hayes, an analyst at Barclays Capital, said: "If the services sector PMI published on Thursday morning were to show a similarly precipitous fall, the MPC is likely to give serious consideration to a QE expansion."

Inflation continued to fall in April, providing more leeway for a fresh money injection.

The International Monetary Fund has recommended that the MPC consider a further reduction in interest rates, which have been at an all-time low of 0.5pc since March 2009, to help the UK weather the eurozone debt crisis.

Although such a move is unlikely on Thursday, there are a growing number of economists who believe it is a possibility in the coming months.

Mr Saunders said he had “some hope” that the MPC would follow the IMF’s advice, while the British Chambers of Commerce argued it could be a useful incentive to boost bank lending.

Mr Buckley said there was a "non-negligible risk" of the Bank lowering rates to 0.25pc.----

Source: http://www.telegraph.co.uk/finance/economics/9308789/Bank-of-England-to-consider-50bn-stimulus-for-economy.html