The black hole in Britain’s public finances is a myth | Letters

The strictures of neoliberalism must be thrust aside and public money used for the public good, says Mary Mellor. Plus letters from Colin Hines, Kevin Donovan and Patricia Borlenghi

Larry Elliott rightly sees the current panic about a black hole" in public funding as demonstrating a fundamental misunderstanding of public economics (The UK economy is about to be thrown into a black hole - by its own government, 2 November).

As he points out, the widespread use of state money creation (quantitative easing) after the financial crisis of 2007-08 and the Covid pandemic fundamentally challenges the fairytale that the public sector is totally dependent on private funding. QE also challenges the assumption that public money printing" automatically leads to inflation. The current inflationary spike comes from non-monetary factors: the war in Ukraine and the Covid slowdown.