Philip Hammond will not tell the truth about the UK’s debt today.
It is likely that he will say that the UK will notionally borrow substantially more than the £55.5 billion that was budgeted by George Osborne for this year.
What he will not say is that £60 billion of government debt has also been cancelled this year. This is because of the Bank of England’s QE programme, which will purchase £60 billion of gilts during the year. And what that means is that the government will have bought £60 billion of its own debts. And as its own accounts show, that cancels the debt in question.
No, it does not cancel the debt in question.
Something we can prove. When that debt matures, as indeed some of that debt has, does it just disappear in a puff of smoke? No, it does not, more debt is issued to roll the old debt over.
It ain’t cancelled, balancing the accounts books is balancing the accounts books, not reality.
It is debt that requires interest payment, and the £60 billion of gilts repurchased will not be subject to interest payment anymore.
Idiot. Treasury pays BoE interest on the QE debt.
And nor will they ever be repaid: even if they expire they will simply be replaced by new debt and almost no net cost.
See, they’re replaced at maturity. Thus they haven’t been cancelled, have they?
Jeebus, he’s supplying his own disproofs now, disproving his own contentions in the one post.