Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what assessment she has made of the potential cost to the public purse of not insuring Government debt repayments against inflation.

The government’s financing strategy is designed to align with the Debt Management Objective, which is to minimise over the long term, the cost of meeting the Government’s financing needs, taking account of risk, while ensuring that debt management policy is consistent with the aims of monetary policy. To meet its financing requirement for each financial year, the government issues an appropriate balance of conventional and index-linked gilts over a range of maturities. Issuing index-linked gilts has historically brought cost advantages for the government due to strong investor demand and has historically helped to underscore the credibility of the government’s commitment to low and stable inflation. As set out in HM Treasury’s Debt Management Report 2025-26, analysis by the Debt Management Office shows that, for gilts that matured since their introduction in 1981 but prior to January 2025, the government generated direct savings of around £90.8 billion in total from the issuance of index-linked gilts if valued at maturity, or £184.7 billion in 2025 terms.