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NEW YORK (Reuters) - The Bank of England got it "about right" when it opted to inject another 75 billion pounds into the financial system, a move that will help fend off the risk of deflation, a top policy maker said on Wednesday.
"I think 75 billion is about right," Bank policy maker Adam Posen told Reuters in an interview on the sidelines of the Economist's Buttonwood conference in New York.
"It's a sensible amount and proportionate to the challenge we are facing."
The additional funds, part of the bank's quantitative easing program, "won't lead to an immediate boom but should fend off deflation risks," Posen said.
He dismissed concerns that the program would push up consumer prices, and said he expected inflation to fall below the Bank of England's 2 percent target by next summer. Consumer prices in Britain rose 5.2 percent in the year to September, matching a high seen in 1997.
Posen said the Bank would review the policy in the months ahead before deciding what steps, if any, to take next.
It is possible to "scale up" quantitative easing if necessary, he said. Critics who say there are diminishing returns are "misguided or delusional," he said, as it's just "monetary policy by another means."
Asked about the impact of quantitative easing on commodity prices, Posen later told the Buttonwood gathering: "Commodity prices wouldn't be coming down right now if they were driven by monetary policy."
Reporting by Steven C. Johnson and Kristina Cooke; Editing by Leslie Adler