Borrowing costs

Soaring borrowing costs hammer home Chancellor’s fiscal firepower

The numbers came as the Treasury spoke with industry leaders about support to help sectors affected by omicron such as the hospitality industry.

Interest payments have jumped by half, or £ 15 billion, since April as inflation takes off in the biggest increase in the cost of debt since 2010. Related to prices.

Meanwhile, spending by ministries increased by £ 2.1bn year-over-year due to rising costs for the propulsion and the test and traceability program.

Bethany Beckett of Capital Economics said the numbers are “unfortunate news for the Chancellor, who again faces the prospect of tighter Covid 19 restrictions and renewed government support for affected sectors. We do not expect much improvement in public finances anytime soon.

However, experts said Mr Sunak would still be able to provide further support to the economy during the winter wave of Covid, as the hospitality industry struggles to cope with a drop in demand.

Alison Ring, Institute of Chartered Accountants England and Wales, said: “The Chancellor is still in a position to take advantage of historically low borrowing costs if he wishes to support businesses affected by the crisis. omicron variant and avoid new scars for the economy. . “