No one should fool themselves into believing that Britain can inflate its way out of its public debt mountain, the Bank of England's deputy governor has warned.
Charles Bean raised the spectre of hyperinflation, saying it is "severely misguided" to hope that a rise in prices would help Britain out of its current predicament.
His comments come amid growing suspicion that politicians around the world may eventually resort to inflation as a means of reducing what they owe in capital markets, and follow the Swedish Riksbank's decision to change its inflation target.
In an opinion piece for Telegraph.co.uk on Friday, Mr Bean writes: "Some people have suggested that a bit of extra inflation now might actually be a good thing. After all, wouldn't it help to get the economy going by reducing the real value of public and private debt? This is severely misguided. See story...
Vantis could sell part of firm to cut debts
Vantis, the parent company of Vantis Financial Management, is holding discussions with potential investors about selling part of the firm to reduce its debts, it said yesterday.
The AIM-listed accountant is also talking to its lenders about restructuring its balance sheet. Vantis owes more than £50m to a consortium of banks, including Lloyds TSB, Barclays and Royal Bank of Scotland, The Times reports.
Vantis said: "Negotiations with both investors and the company's banks are at an early stage and there can be no certainty as to the impact on current shareholders or the terms of any agreement which may be reached."
Vantis said that its banks support the company's efforts to find a solution to its financial difficulties. Paul Jackson, Vantis's chief executive, said: "We're working hard on reducing our gearing ... Our level of debt is simply not appropriate for our business and we need to reduce it." See story...
‘Important to have an anchor’
Lack of innovation for solutions
Some 2,000 consumers affected
Achievements, charity work and other happy snippets