BoE can push up the money supply but not inflation

A surge in the money supply has piqued fears of a leap in inflation. But in our view, there is little chance that this expansion of the money supply, driven almost entirely by quantitative easing, will lead to inflation because demand is very weak. There is a possibility that the combination of a large amount of excess reserves sloshing around in the banking system and loose fiscal policy will lead to higher inflation once the economy has recovered. But if that happened, policymakers would rein in the stimulus.