Economist and founder of Capital Economics Roger Bootle has said that quantitative easing (QE) is not the "inflation danger" people should be worried about - the focus should be on the intentions of the government.
The UK's headline rate of inflation fell to 2% in December, meeting the government-set target for the first time since November 2009, according to official figures from the Office for National Statistics (ONS).
The drop confounded most economists who had forecast it remaining at 2.1%. Falls in utilities and food prices over the last few months have helped bring inflation down, the ONS said.
Worries about the previously above-target levels of inflation had led some to blame the Bank of England's £375bn asset purchase scheme.
But Bootle (pictured) said "QE is not the worry".
"Japan has been doing [QE] for years without an inflation burst," he said.
"The issue is whether the UK government and central bank think inflation is a problem or not. The worry should be whether the authorities want higher inflation.
"Why would they? Well look at the government debt ratio. There are four ways to deal with this. Number one, austerity. Two, grow your way out of it. Three, default. Or four, inflate, thereby devaluing the amount you owe.
"Austerity doesn't work. The economy is growing, so this helps. The UK won't default - but it does do inflation."
As well as inflating away the debt ratio, Bootle said higher inflation may also be the cost the government is willing to pay to step in to help the housing market if it goes bust following a surge in prices.
"You've got to keep your eye on the policymakers. If the housing market burst the government might pump money into the system and give us a burst of inflation."
House prices across the country rose by 8.4% in 2013 as the wider economy picked up, analysis from Nationwide found.
The increase in minimum AE contributions has had little impact on opt-out rates - with cessations after April increasing by less than two percentage points, data from The Pensions Regulator (TPR) shows.
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