FURTHER tax rises are on the cards to meet fiscal rules, economists have warned.
Borrowing costs hit their highest level for almost 17 years yesterday amid a continued sell-off in the bond market.
The yield on ten-year gilts, which reflect borrowing costs, hit 4.81 per cent, the highest since 2008.
Kallum Pickering, at brokerage Peel Hunt, said: “If bond yields rise further, the Chancellor may be forced to make the economically damaging decision of further increasing taxes or cutting back on planned public spending.”
The PM’s spokesman said: “Having stability in public finances is precursor to economic growth.”
Shadow chancellor Mel Stride said: “We shouldn’t be raising taxes to pay for fiscal incompetence.
“Labour’s decision to allow debt to continue rising ever higher leaves us vulnerable even to small changes in markets.”
The yield on 30-year gilts was last so high in 1998 when Tony Blair was PM during financial crises worldwide.
They are trading higher now than after former PM Liz Truss’s mini-Budget, as the markets bet against UK growth prospects.
Further tax rises are on the cards to meet fiscal rules, economists warn[/caption]
