For years, this comical approach to economics was merely something to
With interest rates at their lowest levels in recent history, the Government might be forced to create the billions it needs to fund yet another bank rescue scheme.
According to newspaper speculation, Chancellor Alistair Darling and Bank of England governor Mervyn King are said to be considering what is known as “quantitative easing” — fancy speak for printing money.
The only other country which has tried this policy in recent times is Zimbabwe, where the reckless printing of money has led to inflation of over 10,000 percent. Prior to that, Weimar Germany also tried this solution in the 1920s.
Printing more money would generate cash which would be used to buy so- called toxic assets — bad loans — from ailing banks, allowing them in turn to start lending to businesses and homebuyers again.
Mr Darling said if interest rates neared zero then the Government would work “hand in hand” with the Bank of England to agree how much money to print.
Government borrowing could be as much as £18 billion higher next year, and as much as £50 billion higher in 2010.