Armstrong: Only inflation will combat Western debt

Inflation is the only way to reduce the high debt to GDP forecast for the UK and US, which is set to match that of Greece by 2014, says Distinction Asset Management's Ana Armstrong.

The former Insight multi-manager says according to IMF estimates, debt to GDP is expected to be around 100% for the UK and US by 2014. She says there are historically three main solutions for recovering the high debt levels, although inflation looks to be the "only way" out of the problem. One option is sustained growth, although she says this is not a likely scenario. "Growth is anaemic in the West, unemployment is quite high at 10% in the US, and with GDP depending heavily on consumption, growth cannot materialise like it did five years ago. "So in the West, I do not think growth...