Readers Question: Perhaps the best definition of inflation is that inflation is an increase in the money supply. If the U.S. increased the money supply by 5% today, your prices at the stores would not take an immediate leap of 5%. It would take a while for you to notice the inflation, but it happened immediately.
There can be a link between the money supply and inflation. See: Money supply and inflation
It is really hard to find any meaningful correlation between the money supply (M1) and the inflation rate.
If you look at narrow money supply measures, such as the monetary base then the US has seen a huge increase in the money supply, but no noticeable inflation. But, it is still hard to explain how you can literally create billions of pounds and not cause inflation. Four years ago, ardent monetarists argued that increasing money supply would cause inflation. But, four years later, we’re still waiting.