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People are really worried about inflation. The right-wing media is fuelling that concern by saying government money creation is bound to lead to it increasing. And so people are also worried about interest rate rises. None of this is necessary. A thread….
First, let's deal with that money creation issue. The UK government has created about £900 billion of money in the last 12 years. No inflation in every day prices has resulted. So for those making the claim that it will do so now have to prove why things have changed.
As a matter of fact they have not. The government has had to create money because all the time money is destroyed in our economy. That's the result of the way money works. Paying tax destroys government created money. Paying back loans destroys bank created money.
