Due to the increase in Government debt, the proportion of gilts that are index linked, as well as the proportion of UK Government debt that has been financed through the issuance of Bank of England reserves, the public finances are highly sensitive to increases in inflation and interest rates.

Due to the increase in Government debt, the proportion of gilts that are index linked, as well as the proportion of UK Government debt that has been financed through the issuance of Bank of England reserves, the public finances are highly sensitive to increases in inflation and interest rates. Type: conclusion | Number: 5 | Paragraph: 37 | Response status: under_consideration Government response: I thank the Committee for their conclusions on the government’s fiscal strategy. The Treasury continues to monitor the risks of higher inflation and interest rates closely, and the Charter for Budget Responsibility now contains a new focus on assessing the affordability of public debt. As the Commit