A battle over the direction of monetary policy intensified yesterday as Japan denied accusations that it was trying to revive its economy at the expense of its trading partners.

Referring to the Bank of Japan’s move to ultra-loose monetary policy and similar action by other central banks, Axel Weber, former Bundesbank president and now chairman of UBS, warned that the spread of the approach was “heading into dangerous territory”.

Speaking at the World Economic Forum in Davos, Mr Weber said that the current generation was “living at the expense of future generations” because monetary policy was encouraging people to pull out all the stops to continue consuming heavily. “We are trying to keep a speed limit for our economies that is simply unsustainable,” he said.