MPs have joined an independent Times panel of experts in calling for the Bank of England to rethink its radical £75 billion scheme to pump newly created money into the economy by buying up government and corporate bonds.

Growing doubts over whether the aggressive quantitative easing (QE) moves to jump-start the economy are working as hoped will be fuelled as The Times Monetary Policy Committee warns the Bank today to shift its focus and do more to boost lending to businesses.

MPs on the Commons Treasury Committee have weighed in behind the appeal for action to ease the severe strains in corporate credit markets as members of The Times MPC also raised wider concerns about the effectiveness of QE.

The concerns came as the Bank's MPC is set today to examine the success of its strategy so far and whether it should be expanded. Under the Bank's scheme, it injects its newly created money into the economy by buying government bonds, or “gilts”, as well as businesses' IOUs in the form of bonds or corporate paper. The aims are to stimulate new lending, pump more money directly to businesses and cut borrowing costs by driving down market interest rates.

But Times MPC experts warn today that QE is failing and that the Bank is spending too much of its initial £75 billion fund on buying government rather than corporate debt. “The data so far suggests that QE has not yet been working,” Charles Goodhart, a professor at the London School of Economics and former Bank MPC member, said. He highlighted how businesses and consumers still faced a lending crunch.

“QE needs to be extended and expanded,” he said, calling for the monthly amount spent to be doubled to £50 billion. “More ought to be directed to the purchase of private sector assets.”

Martin Weale, director of the National Institute of Economic and Social Research, agreed. “The programme needs to focus much more on the purchase of private sector assets,” he said. “[It] would do much more to help the economy.”

Sir Steve Robson, former Second Permanent Secretary at the Treasury, said: “I do not think the Bank is targeting this well. It appears the bulk of the money has gone to overseas sellers of gilts. It needs to switch purchases to UK corporate bonds and so directly address credit conditions in the market.”

In a report, the Commons Treasury Committee said that it noted concerns that “not enough is being done to provide liquidity in corporate debt markets” and urged the Bank to do more.

Other Times MPC members were more positive about the success of the QE operation, but urged the Bank to dispel doubts over whether it would spend the full £150 billion that the Chancellor has authorised. Bronwyn Curtis, HSBC's head of global research, said that the Bank should confirm today that it would use the full amount. She noted that “money growth and bank lending are still contracting”. But she added: “I wouldn't change the focus in the early stages as there is already enough uncertainty.”

Anatole Kaletsky, economics commentator of The Times, also agreed that the full £150 billion maximum set by the Chancellor should be used, and perhaps more if necessary.

The Times MPC also unanimously agreed that interest rates should be held today at their record lows of 0.5 per cent.

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