Inflation could blow multi-billion pound hole in UK finances

Inflation could blow multi-billion pound hole in UK finances:

High inflation could cost the British Government tens of billions of pounds in extra interest payments because so much of its debt is index-linked.

More than one-third of gilts – excluding those bought by the Bank of England – are linked to the retail price index measure of inflation.

As a result, if inflation is one percentage point higher over the next five years, payments on those bonds will rise by £26bn, the National Audit Office has warned.

H/t reader squody:

“Ah-ha!!! At last.

The warning lights are actually starting to flash.

Time for a bail in?

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