David Cameron economy warning, in Journal interview
TORY leader David Cameron has warned that printing money to boost the economy must be a "last resort" in a Journal interview.
Speculation about the move has been stoked by Chancellor Alistair Darling, although he today said: "Nobody is talking about printing money".
But extra Government cash could be used to buy assets such as Government or commercial debt, or private equities.
The policy was used by Japan several years ago to stave off deflation - a general trend of falling prices which can lead to economic paralysis.
But it would raise fears about hyper-inflation seen in Zimbabwe and 1920s Germany.
Mr Cameron said: "It shows what a desperate strait the Government has got into and what how difficult the economic situation is and also the extent to which all the previous things they have tried to do have failed.
"It really is the last resort, it should only be considered as the last resort.
"And our point is that before you get there you should take up our proposal for a national loan guarantee scheme. That is the right way of easing the credit crunch."
But the Conservative leader added: "As George Osborne said yesterday you can never rule things out completely. These are extraordinary times."
* See tomorrow Journal for the full interview.
