Some grim developments on the public finances front. Alistair Darling prepares to acknowledge the biggest forecasting error ever made by a British chancellor (he takes the crown from Denis Healey). The IFS calculates that we’ll have to find £39bn a year in extra taxes or spending cuts till 2016, just to plug the fiscal black hole. And, perhaps scariest of all, one of the most powerful UK hedge fund managers warns that the “only policy option left” for Darling is to print lots more money.
This is not a cheap audition to be the next George Soros. Mike Platt, co-founder and chief executive of BlueCrest, Europe’s fifth-largest hedge fund, is a serious figure who usually shuns the limelight.
He predicted quantitative easing would be required six months before the Bank of England fired up the presses. Now he and other hedge funds are betting that Britain will have no choice but to print its way into an inflationary spiral.
This is the key quote from his interview with James Macintosh:
“The easiest way for the system to be saved is to print money. It is the only policy option left.”