It means governments will need to borrow more, and will be looking to fiscal policy to do more of what is needed to promote growth. The sectors that governments favour with spending, such as housebuilding and transport, will benefit directly, but so will the wider shares-based economy as the incomes the new work generates filters through to other sectors. Today, bonds look very expensive by historic standards while riskier shares offer a better income.
John Redwood is Charles Stanley’s chief global strategist
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