Jeremy Warner: Inflationary nemesis awaits gilts investment
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Your support makes all the difference.Outlook After Wednesday's gilt auction flop, yesterday there came a rip-roaring success in government debt issuance, with the latest offering 2.7 times subscribed. So is the buyers' strike over before it had even properly begun? It would be unwise for the Debt Management Office to assume so. Yesterday's issue was an index-linked gilt, and if you think what the Government is doing by borrowing so much is inflationary, that's the only form of government debt you'd be interested in buying. There are two ways of defaulting on your debt. One is simply not to pay. The other is to inflate it all away. Post-war British governments have been particularly good at this latter form of default, and that's what's going to happen this time too.
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