Are you wealthy? Seems I am.

*Maizie, 2 links that answer your questions better than I would.

www.eveningexpress.co.uk/news/uk/debt-how-much-has-the-uk-borrowed-during-pandemic/

www.bankofengland.co.uk/monetary-policy/quantitative-easing

M0nica

*Maizie, 2 links that answer your questions better than I would.

www.eveningexpress.co.uk/news/uk/debt-how-much-has-the-uk-borrowed-during-pandemic/

www.bankofengland.co.uk/monetary-policy/quantitative-easing

Neither of those links (and I did read them) claimed that inflation is increasing. The one from the Evening Express even suggested that the country will never pay back the debt, which is possible. Interest rates are currently so low that they're negligible. Any natural inflation would in fact decrease the "debt". Holders of bonds, such as pension funds, are effectively paying the government to keep their money safe.

The priority for the government in the coming years will be to ensure that the people at the bottom of the pile (and goodness knows how many people will be unemployed and companies bankrupt when furlough finishes) have enough money to live. It makes social and economic sense. Firstly, I don't think anybody wants starving and homeless people. Secondly, people at the bottom of the income distribution curve tend to spend their money on "stuff" rather than hoarding it or investing in assets, which don't get into the economy. The most efficient way of doing that is to increase benefits. It would be wonderful if a few million jobs could be created, but that's not going to happen any time soon and will also need government funding.

PS. The Bank of England doesn't actually need to sell bonds to raise money. It does so because there's a demand for them and keeps big funds stable and secure.

I can’t see any policy that taxes people based on housing wealth being brought in by a Tory government- a Labour one would be very reluctant too, as it would alienate swathes of support in the south of England.

It might be more popular in the north, where people who have worked just as hard for their living are kept geographically immobile because their houses are worth a fraction of those in the south, and who have no chance of accumulating a ‘bank of mum and dad’ to help them give their children a leg up by downsizing.

Such a policy might go a tiny way towards the ‘levelling up’ that was promised to the north, but it was never a promise that anyone expected to be kept, was it?

Inflation is always a danger, that is why the Chairman of the Bank of England has been so careful about using quantitive easing it. So far he has kept the balance but you have only to look at Germany in the 1920s or several big South American countries in the 1970s and 80s to see what quantitive easing can do to an economy that chooses to print money to get out of trouble.

Because of where I live in London my garden shed is probably worth more than a small flat in the north of England.

M0nica

Inflation is always a danger, that is why the Chairman of the Bank of England has been so careful about using quantitive easing it. So far he has kept the balance but you have only to look at Germany in the 1920s or several big South American countries in the 1970s and 80s to see what quantitive easing can do to an economy that chooses to print money to get out of trouble.

So you keep telling me, MOnica

So how do you explain the fact that we have been employing QE since 2008 and have not had raised inflation?

Money creation is not the primary cause of inflation. The initial cause is a shortage of resources available for purchase.

If you examine the countries you cited you will find that their economic and political situations are quite different from those which apply in the UK at the moment. Our 'problem' at the moment is that we have plenty of resources available for purchase but certain sectors have no money to purchase them with. By 'resources' I mean anything, goods or services which can be bought and sold.

If there is a movement towards inflation it can be curbed by fiscal policy, which removes surplus money from circulation.

Incidentally, Japan runs a massive deficit. Do they have rampant inflation?

Charleygirl5

Because of where I live in London my garden shed is probably worth more than a small flat in the north of England.

Yes, quite probably; and comments like this are why the idea might go down quite well in 'red wall' constituencies.

Because it has been well and carefully managed by the Bank of England in an exceptional low interest environment.

M0nica

Because it has been well and carefully managed by the Bank of England in an exceptional low interest environment.

Aaahhh. So money creation doesn't inevitably lead to rampant inflation if it is carefully managed.

Thank you Monica. That has been part of my contention all along... Every time you've trotted out the Germany, Venezuela trope I've said that inflation has to be managed.

Any thoughts on Japan, then?

I didn't mention 'inevitable' or 'rampant', but it is a real danger