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13 November 2014

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Ian Jenkins

We seem to be back to the problem of lack of demand.

Either the UK chancellor, of whatever colour, discriminates in favour of the Scottish part of the UK and allows it to borrow an extra £4bn - or we're sunk now rather than later. Such are the politics of the global economy.

The City Growth Commission is making a similar appeal for metro regions in England outside London. Their thinking is influenced by the fact that grants from the Treasury to these areas are certain to be cut substantially - and Scotland won't be protected either as John Kay suggested yesterday in the FT.

Economists from France and Germany are working on short-term fixes to their nations, never mind regions, but the recommendations for austerity and more spending on infrastructure have not even been approved by their governments as a first step before submission to the European Commission.

Change international politics?

Ian Jenkins

The West's lack of demand can only be solved in the immediate future by endless quantitative easing, suggested Strathclyde graduate and hedge fund manager Hugh Hendry in an interview with 'Money Week' last month.

This is reckoned to be the only way the countries can keep their public spending at levels that won't provoke riots. Because in the valueless global economy the procedure can't easily be stopped.

Of course, such debasement of the currency is not a sustainable solution, as many including the Roman empire found. Apparently we still can't change international politics.

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