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The strange circle of government debt

David Smith, Economics Editor of The Sunday Times, writes for the ICAEW Financial Services Faculty about how the government finances its own debt during the pandemic.

The world of debt was strange before the Covid-19 crisis came along and now it is stranger still. Some would see it as a very expensive game of pass the parcel, the aim of which is not be left holding it if and when the debt goes sour.

Private investors, financial institutions of course normally hold debt but this year, the big story has been the re-emergence of central banks as the key players.