The Treasury will need to pay at least £16 billion more over the next five years to convince investors to buy the £815 billion of gilts that it needs to sell to cover government borrowing requirements, The Times has learnt.
The Government already reckons that the cost of interest payments will reach £42.9 billion for the year 2010-11. However, City economists believe that the Treasury will be forced to cover the cost of increased yields on its new gilt issues because the market will be flooded with other government debt and increased corporate bond issues. Full story...
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