Laith Khalaf turns his eye to the Chancellor's borrowing needs post-Budget and the changes small increases in inflation could do to public finances
Heavily-indebted Chancellors would normally welcome a nice dose of inflation to whittle away their borrowing, but rising prices are a double-edged sword in today's climate of ultra-low interest rates. That's because inflation concerns have been bumping up the cost of government debt this year, and could yet blow a hole in the Chancellor's best laid plans. The government was able borrow money for 10 years at just 0.2% at the beginning of this year, and that's now risen to 0.7%, as markets are pricing in an economic reflation on the back of the vaccine roll out. That's still an incredibly ...
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