Question to the HM Treasury:

To ask Her Majesty's Government what assessment they have made of the likelihood of a rise in interest rates due to an increase in borrowing.

The Bank of England’s Monetary Policy Committee is responsible for setting interest rates to meet the inflation target, and has operational independence from the Government to determine the appropriate level of interest rates.

The Government is ultimately a price-taker, with the price of Government debt dictated by the market. UK debt benefits from “safe haven” status. The trust in the UK’s institutions makes gilts a popular form of sovereign debt compared to many other comparable issuers, keeping its borrowing costs low.

UK borrowing costs tend therefore to chiefly be driven by global risk sentiment and currently stand close to historical lows. The gilt market is deep and liquid with a good track record in responding smoothly to increases in gilt supply.