The Bank of England's decision in March to create money in the process known as “quantitative easing” was seen as a dramatic escalation in its efforts to combat the credit crunch. The results, it must be said, have been rather less than dramatic.

The aim was to reduce the cost and boost the amount of lending in the economy. Yields on gilts initially fell sharply as the market anticipated Bank purchases of government bonds. This, it was hoped, would feed through into lower interest rates on corporate debt. But gilt yields have since reversed most of the fall.

The Bank is expected to say it is too early to judge the impact of the new policy. But MPs have joined members of the Times panel of monetary experts in calling for the Bank to rethink the scheme.

They want the Bank to turn its focus from buying gilts to buying corporate debt, which would have a more direct impact on the credit markets.

This would also limit some potential collateral damage. Lower gilt yields tend to increase the estimated deficits on corporate pension funds. Among the biggest schemes affected would be those run by the banks, which would ultimately have to put in more money to fill the holes.

That would reduce their ability to lend, thus defeating the whole object of the exercise.

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