The colossal downward revision to the OBR’s forecast for interest payments in the Autumn Statement highlighted that the amount of austerity needed to attain a budget surplus is very sensitive to financial market conditions. While gilt yields are unlikely to rise sharply, we think there is a strong chance they rise more than the OBR expects, leading to a much bigger interest bill than the fiscal forecasts assume.
Subscriber content
Read this in full, free
Start a free trial and use one of your 10 free starter credits to unlock this piece.