Commenting on the expected £20bn UK government debt interest payments for June, the Institute for Fiscal Studies (IFS) sounds a note of caution. Although this represents a big jump in the UK’s debt interest bill, various underlying factors contribute to a spike in June and the figure is expected to drop in July, says the IFS.
Isabel Stockton, research economist at the IFS, said: ‘Debt interest is high in June of every year due to accounting quirks, and it will drop substantially in July. Nevertheless, debt interest will be much higher than we have become used to across the whole of this year due to sharply rising inflation and rising interest rates. Much more important than the size of this month’s, or even this year’s, debt interest spending spike is whether inflation will quickly and sustainably return to target. If it does, debt interest will start to fall quickly in response.’
Commenting on the expected £20bn UK government debt interest payments for June, the Institute for Fiscal Studies (IFS) sounds a note of caution. Although this represents a big jump in the UK’s debt interest bill, various underlying factors contribute to a spike in June and the figure is expected to drop in July, says the IFS.
Isabel Stockton, research economist at the IFS, said: ‘Debt interest is high in June of every year due to accounting quirks, and it will drop substantially in July. Nevertheless, debt interest will be much higher than we have become used to across the whole of this year due to sharply rising inflation and rising interest rates. Much more important than the size of this month’s, or even this year’s, debt interest spending spike is whether inflation will quickly and sustainably return to target. If it does, debt interest will start to fall quickly in response.’
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