An unsettling look at the economic settlement that Britain now seems willing to accept can be found in this week’s latest fiscal forecast. By the end of the forecast period, borrowing will have decreased from 5.2% of GDP in 2024–2025 to about 1.6%. Public debt stabilises at roughly 95% of national income. At those levels, even small shifts in interest rates matter: the Office for Budget Responsibility estimates that a sustained one-percentage-point move in Bank Rate changes government borrowing costs by around £15 billion.
