But Andrew Bailey said the Bank of England would “not hesitate to take all necessary actions” to shield Britain's economy from the impact of the coronavirus pandemic. The central bank boss said the UK will not fall into an inflationary spiral and resort to irreversibly printing more money to allow the government to run up a bigger deficit because it would “damage credibility on controlling inflation”.
He said the bank would reject ideas of “monetary financing” – where central banks buy the government bonds of their country - to boost the economy as the nation tackles the coronavirus pandemic.
Mr Bailey said the world faced a "time of great uncertainty” but he would oppose any calls for the BoE to print money simply to help the government.
Writing the Financial Times, Mr Bailey said: “Using monetary financing would damage credibility on controlling inflation.
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Coronavirus news: Andrew Bailey has said more money will not be printed (Image: PA)
Coronavirus UK: The Bank of England has been urged to print more money (Image: GETTY )
“It would also ultimately result in an unsustainable central bank balance sheet and is incompatible with the pursuit of an inflation target by an independent central bank
The idea of central banks helping governments to spend more using monetary financing, whereby a central bank prints new money for governments to use rather than the governments acquiring money through taxation or borrowing has raised concerns about a rise in inflation in the future.
It has even drawn parallels with the disastrous hyperinflation of 1930s Germany and 1990s Zimbabwe.
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Coronavirus UK: Britain is on lockdown (Image: GETTY)
The BoE last month ramped up its bond-buying programme by a record £200 billion, similar to moves by the Federal Reserve and the European Central Bank as central banks around the world scrambled to limit a deep recession.
The next day, Chancellor Rishi Sunak announced the British state would pay 80 percent of the wages of workers who are temporarily laid off by companies, in the hope of getting them back into work quickly