Pity the central banks' lockdown dilemma: do they fight inflation or deflation? | Larry Elliott

Printing money to ward off recession is the right approach - but it's fraught with risk

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Life used to be so easy for central banks. A tweak here and a tweak there was all it took to keep inflation under control. Now they are creating money in unprecedented amounts and contemplating negative interest with only the sketchiest idea of how things will pan out. It is much more complex and much more dangerous, not least for central banks themselves.

The problem is that lockdown is affecting both parts of the economy. Keeping people at home and restricting their movement reduces the supply of goods and services, which would normally mean upward pressure on the cost of living.