This is utterly ludicrous. The City is willing to mop up £100 billion of UK government debt to be sold in the next year as a consequence of the quantitative tightening programme, effectively increasing financial risk within the financial services sector whilst also reducing the money supply to keep interest rates high, but the idea that the UK government might use funds the City might save with it for creative purposes is considered outlandish and unacceptable.
Issuing more debt to the City will increase that financial risk and increase interest rates jusxzt as much – and for exactly the same reasons as – QT will.
Spud’s insistence is that more debt in the markets is bad and more debt in the markets is good.
He been seein’ white rabbits out on those walks?