SO the Bank of England will create another £75bn by the system called quantitative easing, the electronic creation of new money which isn’t backed by assets.

This £75bn will be handed over to the banks: those same banks that caused the economic crisis by irresponsible lending in the first place.

£75bn perhaps doesn’t sound much, but it’s more than a £1,000 for every man, woman and child in the country.

The hope, then, is that these banks will use this money to finance even more loans or invest in companies by buying shares and, in exchange, they give the Bank of England another piece of paper called a bond.

Reality suggests that they will simply hold on to most of the windfall, simply to boost their reserves without any benefit to the economy whatsoever.

Our problem is that any quantitative easing dilutes the value of the pound in your pocket in the form of higher inflation, a hidden tax which we all get to pay and which affects to a greater extent the poor members of the community as a larger percentage of their income.

Wouldn’t it be far better if the Government used this money to directly boost the economy, perhaps in the form of a house-building programme?

Taking a measure such as this would reduce inflated house prices and concentrate on properties for first-time buyers.

Some of these properties could either then be immediately sold or rented out. Perhaps there also could be an investment in sustainable energy, a nationalised company making and installing solar panels at reasonable prices, which would reduce our reliance on imported energy, both of which would ensure a return on our investment and benefit the economy rather than just the banks.

An additional note on quantitative easing: Bank of England since 2008 £275bn, US Federal Reserve since last year £372bn, European Central bank since its inauguration zero, zilch, yet we have a Euro-crisis. It doesn’t make sense, but I’m sure it will eventually.

MR R LEE, Burford Road, Witney