Cost of national debt hits 20-year high
The interest the government pays on national debt has reached a 20-year high as the rate on 30-year bonds reaches 5.05%. A rise in the cost of borrowing comes at a difficult time for the chancellor, Jeremy Hunt, as he prepares for the autumn statement on 22 November. Mr Hunt has already made clear that tax cuts will not be announced in November. The higher cost of servicing the country's debt pile could influence the decisions he makes on spending. The total amount the UK government owes is called the national debt and it is currently about £2.59 trillion. The government borrows money by selling financial products called bonds. A bond is a promise to pay money in the future. Most require the borrower to make regular interest payments over the bond's lifetime. UK government bonds - known as "gilts" - are normally considered very safe, with little risk the money will not be repaid. Gilts are mainly bought by financial institutions in the UK and abroad, such as pension...