Page last updated at 18:07 GMT, Thursday, 11 November 2010

Redwood calls on BoE to avoid 'fuelling inflation'

Tory former cabinet minister John Redwood has urged the Bank of England not to implement any further quantitative easing "in the current circumstances".

The MP for Wokingham said inflation was being fuelled by "enormous" quantitative easing in the US.

Opening a Commons backbench debate on 11 November 2010 on Britain's policy for growth, Mr Redwood said the government hoped to spend an extra £92bn a year in cash terms on public services by 2014-15.

The UK's tax revenues would therefore need to increase substantially if ministers' plans to reduce the deficit were to be realised, he noted.

Mr Redwood told MPs: "So the government has a great deal invested in the idea that growth is going to speed up and be sustained, and we all do.

"The one thing we can't afford from here over the next five years is rapid inflation. Inflation in this country is currently too high.

"I hope the chancellor will make very clear in the next couple of weeks that we do not need any more money printing or quantitative easing in the current circumstances.

"The economy is growing, jobs are being created, inflation is still running at somewhere between 3% or 4.5% depending on which of the indices you rely on.

"When you talk to business, there is a lot of inflation out there in the pipeline thanks to the commodity price increases and the increases in the world supply prices - largely fuelled by the enormous quantitative easing under way in the USA.

"It doesn't need Britain to fuel it further with quantitative easing."

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