A Bank of England supremo said it would be "easy" to stop inflation from racing ahead despite "printing" £75 billion of money to boost the economy.
Writing in the Daily Mail, the bank's deputy governor Charlie Bean said although it sounded "too good to be true", the extra money was needed to help save the country from a "particularly nasty recession".
The cash injection - technically known as quantitative easing - happens through the central bank buying up a range of financial assets from the private sector. It is designed to bolster firms' spending power for other goods and services, helping to drive up economic activity.
Mr Bean said: "In normal times. an injection of extra money of this magnitude might be expected to lead to too much money and spending in the economy and a rise in inflation.
"But right now, there is not enough money and spending in the economy and that is what we need to rectify.
Funny. Wasn't the ostensible reason to prevent deflation last week ? (Inflation is currently 1% higher than HMGs 2% target).
Now the problem is that "there is not enough money and spending in the economy".
It's a long long time since I studied economics and I'm sure it shows. But if there's not enough spending (aka the money's velocity is too low) will adding more improve things ? Will the dosh go to improve bank balance sheets ?
And when the velocity does pick up, won't prices take off as that extra dosh emerges ?