MMT Verify: Will Investors Shun Government Debt? — NeilW

In response to a report by the UK Office of Budget Responsibility1 UK Journalist Robert Peston tweeted the following opinion:

So the obsession of Hunt and Sunak with defeating inflation is understandable - because in the absence of any significant fall in inflation, there is a risk that investors will shun UK government debt and interest rates for the government and for all of us would then rise to crippling levels. This parlous debt backdrop explains why the Bank of England and the Treasury are prepared to risk recession to bring down inflation.

Let’s look into this claim using the MMT lens.

New Wayland
MMT Verify: Will Investors Shun Government Debt?

NeilW