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LONDON, March 8 (Reuters) - Measures taken to boost the money supply should lift Britain out of recession more quickly but the Bank of England has scope to take more action if needed, BoE Deputy Governor Charles Bean said.
Britain's central bank pledged last week to buy assets -- mainly government bonds -- with 75 billion pounds ($106.7 billion) of newly-created money, writing a new chapter in the country's monetary history.
"We have the scope to do more if that proves necessary. Bean wrote in Monday's Daily Mail newspaper. "But equally, when the time comes, we will be able to change course to prevent inflation taking off."
Bean said Britain's economy was in the early stages of "a particularly nasty recession" and the unprecedented monetary action was needed to shorten the downturn and prevent inflation falling too far below target.
The BoE last week cut interest rates to an historic low of 0.5 percent and said action to boost the money supply -- a policy known as quantitative easing -- was needed to get credit flowing through the economy again.
Bean said there was a good deal of uncertainty regarding the precise impact of the initiative and policymakers would pay close attention to lending and spending figures.
He said the central bank's bond purchases should make it cheaper for companies to borrow, and the greater availability of finance should encourage firms to maintain employment and investment levels.
"We will be monitoring the situation closely to see how the quantity of money and credit in the economy and, most importantly, the amount of spending is affected," he said.
(Reporting by Christina Fincher, editing by Mark Trevelyan)