From Prof Philip Booth, Prof Tim Congdon and others.

Sir, Deflation, as well as inflation, is a monetary phenomenon, and can, and should, be prevented by monetary policy. In recent months bank lending to the private sector has been slowing rapidly, and, over the six months to October, the money balances of non-financial companies contracted in nominal terms at the same time that energy costs were soaring. The abrupt fall in their money holdings is a clear symptom of financial difficulties.