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That may seem bad, but you would be quite entitled to say “so what!”.

The rationale behind cutting government debt at a time when interest rates were at record lows always seemed a little odd. Right now, the yield on UK ten-year government bonds is just 0.83%. At a time when the global economy suffers from little demand, at a time when UK productivity growth is lamentable, and infrastructure appears to be clogging up, paying down government debt seems counter-productive.

But this may be an irrelevance anyway. Although UK inflation is likely to see a mild rise over the next few months, across the global economy deflation is a bigger threat than inflation. Interest rates are negative in Sweden, Denmark, Switzerland, Japan and the euro area.

There is a growing feeling that the next step will entail some kind of money printing – what some refer to as helicopter money, where central banks create money and it is issued to either fund spending on infrastructure or tax credits. That may seem dangerous, but when there is a saving glut across the world, and the private sector is reluctant to increase borrowings, the alternative is even more dangerous.

Don’t be surprised if governments across the world start spending more, leading to a surge in public debt, but which is then written off, in the form of money creation.

By Michael Baxter, group editor and economics expert at Amplified Business Content