LONDON (Reuters) – Britain’s finance ministry on Wednesday said its commitment to the government’s fiscal rules was non-negotiable, in a statement issued on a day of market turmoil for sterling and British bonds.
Rising borrowing costs add to the challenges facing finance minister Rachel Reeves who is planning to sell hundreds of billions of pounds’ worth of bonds this year to fund public services and growth-boosting investments while still meeting the government’s rules limiting debt and spending levels.
“No one should be under any doubt that meeting the fiscal rules is non-negotiable and the government will have an iron grip on the public finances,” the spokesperson said.
“UK debt is the second lowest in the G7 and only the OBR’s (Office for Budget Responsibility) forecast can accurately predict how much headroom the government has – anything else is pure speculation.”
British government bond prices fell sharply for a second day in Wednesday’s trading, pushing 10-year yields to their highest since August 2008, while 30-year yields hit a new 26-year high.
(Reporting by William James; Editing by Chris Reese and Nick Zieminski)
