Growing signs that Britain is poised to recover from recession should lead the Bank of England to put its controversial scheme to inject newly created money into the economy on hold from this month, The Times Monetary Policy Committee says.

A five-strong majority of the nine-member expert panel called for the Bank to halt its radical quantitative-easing (QE) programme to pump extra money into circulation through massive buying of government and corporate bonds as soon as it completes its present £125 billion of planned purchases.

But the majority of The Times MPC also called for the Bank to make clear to edgy markets nervous over fragile recovery prospects that it stands ready to return to the offensive, and to extend QE, if there is any hint that the nascent economic revival might falter.

The four other panel members said that the Bank should use up the rest of the maximum of £150 billion financial firepower for asset purchases granted to it by the Chancellor, voicing anxieties — shared by most of the rest of the group — over the threat to recovery posed by the continuing credit crunch as banks’ lending remains badly constricted.

Several Times MPC members called for the Bank to rethink the concentration of the QE scheme on purchases of UK government bonds, known as gilts.

They urged the Bank’s MPC to shift strategy and attempt to do more to bolster credit conditions for businesses through larger potential purchases of corporate debt.

Among the panel’s majority calling for at least a temporary hold on further quantitative easing, Bronwyn Curtis, head of global research at HSBC, said that Bank’s “printing money” drive already amounted to 9 per cent of GDP and was twice as large as the equivalent US effort relative to the size of the economy.

She said: “I think there is scope to wait for further evidence of its effect as long as it is made clear that further injections are possible.”

Anatole Kaletsky, chief economics commentator at The Times, echoed that view. “It is premature to talk about an increase in QE,” he argued.

But he said the Bank should make clear that it also had no intention for now of unwinding the past injections of liquidity.

Charles Goodhart, a former member of the Bank’s MPC, warned that “green shoots” in the economy remained fragile but pointed to signs that “monetary growth may be beginning to recover”.

Professor Goodhard added: “There is no case whatsoever for easing back on QE, but, as yet, equally no strong case for any further major expansion,” he said.

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