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  The Bank of England have announced its decision for further QE increasing money supply by a further £75bn.
  
  Some experts think that in all another £300bn will be added to the total.
  
  I am not convinced that this is the right thing to do. The first round of QE seems not to have had any significant effect on boosting the economy but it is certainly helping boost inflation. We can certainly expect a lot more inflation hitting the economy as a result of this decision in the next 18-24 months. We are already expecting it to top 5% by the end of this year.
  
  In addition gilt yields and borrowing rates being held down so low so long is one of the factors that contributed to the mess we are in.
  
  More inflation is bad news for our long term borrowing rates. True there has been some talk, ludicrous as it is, about reducing the bank base rate to 0.25%. The problem is that all this feeds through into inflation we will all end up paying for it and it will do long term competitive damage to the economy.
  
  This is very worrying.
  
  On a personal level I would urge people to clear down debt as much as they can while the going is good. Get rid of your credit cards and overpay on mortgages (make sure that are daily or monthly interest calculations for this), also stop borrowing more money and build up some cash reserves for emergencies. Prepare for the worse, a significant increase in interest rates to control domestic inflation.

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