Printing Money Is Safe: Bank of England

The Bank of England can control the threat of inflation generated by its radical new policy of creating money, the bank's deputy governor said in a commentary published Monday.

Britain's central bank announced a 75 billion pound ($103.6 billion) plan last week to buy assets, such as government securities and corporate bonds, over three months and pay for them by crediting banks' reserve accounts -- effectively creating new money.

The Bank's deputy governor for monetary policy, Charles Bean, said the move may lead to a rise in inflation in normal times, but that it was needed for economic recovery.

He said the Bank would watch the effect it had on spending.

"As the economy recovers we will probably need to remove some of the extra money in order to ensure that inflation does not pick up too much," he wrote in the Daily Mail newspaper. "That is easily accomplished by pursuing the process in reverse, namely selling the assets that we have bought back to the private sector."

Bean said the Bank of England, which cut rates to its lowest ever level of 0.5 percent last week, would also pump more money into the economy if needed.

"We have the scope to do more if that proves necessary. But, equally, we will be able to change course to prevent inflation taking off," he wrote.