Forget this whole debate about £5bn more in capital spending. Even if it’s true, and even the person I suspect is the source of this story was himself suggesting the figure was “toppish”, £5bn is marginal. It is the difference between public sector net investment being cut from £50bn last year to £29bn by 2014, rather than the £24bn currently planned.

21 piggybank g 6201 Plan BoE, not Plan BRemember that the Coalition announced that even these massive cuts, 58 per cent in real terms, were actually £2bn less that the plans inherited from Labour. I’d expect them to find £2-3bn more to slow the pace of this decline.But no, the real deal is undoubtedly whats occurring at Threadneedle Street. For the first time ever the Bank of England minutes released today showed the Bank actively discussing an “Operation Twist”.

And they also discussed giving a US Fed-like “explicit guidance” note that interest rates were on hold for years. For the first time since interest rates hit 0.5 per cent they discussed lowering interest rates even further. I was taken aback by paragraph 29 of the minutes.

Operation Twist is what we might get from America later today. It basically involves swapping the short-term government debt the US central bank has already bought through quantitative easing (QE), for medium and longer term debt, to help bring down longer term interest rates in the economy. The Bank of England considered it this month. In the end they didn’t go with it. It might be that the US Fed is a little stymied by political pressure from presidential candidates accusing it of “quantitative treasoning”. The Bank of England minutes suggest it can simply restart QE.

The other radical measures were not pursued by the MPC. But the mere fact that they were discussed is a clear signal that the BoE is thinking big. Cutting rates again to a new record was discussed but there are fears for the impact on banks, building societies and the normal functioning of money markets. No, all roads lead to more QE. But not just any old QE.

In Britain a further bout of QE seems to be positively being lobbied for by the likes of Vince Cable. But what’s the point of buying government bonds? The Operation Twist mention suggests the bank might buy long-dated government debt if, probably when QE is restarted. This should lower longer term interest rates.

But no, the real direction of travel is what I call Super QE, or what should probably called SM-QE. Directing the loosening of monetary policy towards lending to small and medium type businesses. Vince Cable wrote this pamphlet which floats ideas around using QE to buy bundles of SME debt or corporate bonds. Alistair Darling tried it in 2009, and then Mervyn King was not keen. If QE is to involve buying debts with credit risk, it is a fiscal matter, and one for an elected government to take. My sense is that this situation has not changed. But I have noticed no complaints from Threadneedle Street or the Treasury about Dr Cable’s musings. They chime rather nicely with the views of Adam Posen, a member of the Monetary Policy Committee.

The question therefore, is whether the Treasury and George Osborne are preparing for Super-QE where the Treasury assumes the credit risk for what is effectively the Bank of England lending tens of billions to companies. The sharp decline in world economic prospects makes me think they are. Plan BoE, not Plan B.

Follow Faisal Islam on Twitter @FaisalIslam