Rachel Reeves is set to deliver her spring statement amidst weak economic growth and increased uncertainty, with government borrowing costs surging. The yield on 10-year UK government bonds has reached 4.6%, raising concerns over the nation's ballooning debt, now over £2.6 trillion. This debt equates to nearly 100% of GDP and is driven by financial responses to recent crises. As a result, Reeves may lose the £9.9 billion fiscal headroom previously held, leading to potential cuts in public benefits, reflecting an evolving financial landscape and budgeting pressures.
The yield on 10-year UK government bonds has reached 4.6%, surpassing levels seen during Liz Truss and Kwasi Kwarteng's turbulent mini-budget days.
Paying interest on the ballooning debt is projected to cost the government about £105 billion this year, about 8% of total public spending.
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