Post-Covid inflation could push interest on UK’s debt above £100bn, warns BIS

Bank for International Settlements says inflation spike could raise the cost of borrowing to post war highs

Inflation could spike this year, putting pressure on central banks to raise the cost of government borrowing to post war highs, according to the Bank of International Settlements, which warned of daunting" issues confronting policymakers during the post-pandemic recovery.

With UK government debt spiralling to 2.2tn due to the costs of the pandemic, a jump in interest rates to levels last seen in the 1990s could more than double the cost of national borrowing.