“Self-defeating” tax rises and persistent inflation are to blame for the recent surge in Britain’s borrowing costs, Rachel Reeves has been warned.
Simon French, chief economist at Panmure Liberum, said the increase in UK gilts – a benchmark for the cost of servicing the national debt - was creating “angst” around Britain’s fiscal position.
He said: “Self-defeating tax increases, asymmetric inflation, and central bank asset sales are all UK factors that have acted to amplify the global grind higher in sovereign interest rates.”
It comes after the UK’s long-term borrowing costs surged to a 27-year high this week.
Mr French said Ms Reeves was facing a black hole of between £20bn to £30bn in the upcoming autumn Budget, which will take place on November 26.
