Bernanke set to start the prints

US FEDERAL Reserve chairman Ben Bernanke yesterday opened the door for a fresh round of quantitative easing as policy- makers on both sides of the Atlantic consider printing more money to stimulate their sluggish economies.

But Bernanke said members of his interest-rate-setting committee were still struggling to judge how large the next stimulus package should be.

The Fed chairmanalso indicated that policymakers were trying to craft a plan to lift inflation from super-low levels. He made his remarks in a speech delivered to a Fed conference in Boston.

Inflation figures yesterday showed that consumer prices, excluding energy, were flat in September for the second straight month, a sign that cost-conscious American consumers are making it difficult for businesses to charge more.

The Fed chairman said the US central bank must weigh the risks of a programme to buy government bonds and determine how the debt purchases would be paced. The Fed's bond purchases would be intended to lower long-term interest rates to stimulate buying and spending and help lower unemployment.

US policymakers are widely expected to announce a Treasury buying programme at their next meeting on 2-3 November.

Bernanke said: "There would appear - all else being equal - to be a case for further action."

World stocks rose initially after Bernanke's remarks, though London closed lower. The prospect of more dollars swirling around the financial system did nothing to help the dollar itself, which slid further against foreign currencies.

The economy is growing at a pace "less vigorous than we would like," Bernanke acknowledged.