Thursday 13 October 2016 6:00 am

Only half of us want central banks to give us free money

Only half of the population think central banks should dish out free cash to every citizen across Europe, a new survey has revealed.

In a survey looking at what the public thinks of the controversial idea of "helicopter money", just 54 per cent said they wanted to be given €200 (£180) a month tax free for a year.

Dutch banking giant ING conducted the survey of more than 11,000 people across Europe, which also found only one in four people said they would spend at least half of the money, raising question marks about how much bang-for-its-buck the policy would deliver.

Helicopter money, until recently a relatively obscure economic theory which involves dishing out one-off or short-term cash payments, to citizens in a bid to fire up the economy, has come into the headlines of late over fears central banks are running out of ammunition.

Proportion of consumers who would spend at least half of a €200 a month tax-free windfall

ING found more than half of those asked said they would save or invest more than half of the free cash, while one in six said they would pay off debts.

Britons were most sceptical as to the potential effectiveness of the policy, with only 30 per cent expecting it to result in stronger economic growth – the lowest level of any European country. Only one in three people also drew the link between more cash in circulation and inflation, with most expecting prices to stay static.

ING calculated on average 24 per cent of the €200 a month windfall would be spent, equating to a consumption boost of three per cent across Europe. Although the relationship between extra spending and economic growth is slightly complicated (depending on how much is spent on domestic goods and services and so-called "second order effects" which look at how money recirculates through supply chains) such a boost could result in a GDP bump of around two per cent.