Former chancellor of the exchequer Ken Clarke told TimesRadio if the UK continues to print money and build up debt in order to cope with the coronavirus pandemic, a financial crisis could occur due to inflation in the future. Mr Clarke added Rishi Sunak must not take the easy way out of the financial chaos caused by the COVID-19 pandemic.
Mr Clarke said: “He must raise some taxation.
“The easy way out will be to say, we have found this free money and you just get the Bank of England to print it.
“You sell the bonds to the Bank of England and they buy it with the money they have printed, and it is all free money that you keep spending.
“Every lobby known to man is demanding that their particular lobby gets some more money.”
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The former chancellor added: “He must raise some taxation to show common sense.
“If you just let it build up and pile up debt because debt doesn’t matter anymore then all that has happened is you are waiting for inflation to come back.
“When it does come back a financial crisis will hit you and a disaster will occur.
“So raise some taxation!”
“You do have to have in the back of your mind that the rest of your time as Chancellor is going to be sorting out the mess that all this money printing, borrowing and debt is going to cause over many years.
“The immediate priority has to be soothed now and the bill is going to be enormous.
“Some of this debt will never be repaid.
“Some of the debt will have to be forgiven or recycled.”