Originally Posted by
hulahoop7
QE hit £745bn in summer, with more to come. Out of a total debt pile that has just jumped to £2tn in short order. Im not suggesting the debt is written off, but QE is made firm, and locked in for long term. Cost of the debt is essentially zero as interest is paid back to the exchequer.
If hyperinflation was a risk then it would have happened already, as the money is already ‘printed’ and those forces have already been released. Fortunately the deflationary pressures over the last decade have countered that and created this opportunity.
When last I looked, the BoE raises money (to lend to HMG) by selling government bonds, which are essentially a promise to repay the loan with a guaranteed interest rate. The lower the likelihood of the principal being repaid, the higher the interest rate on the bond.