Is Boris Johnson the luckiest prime minister ever? This week, the Government can borrow money for ten years at 0.48 per cent and for thirty years at 1.16 per cent. At these rates, it would irresponsible not to borrow more.
The age of austerity can be brought to an end at exactly the same moment we leave the EU, opening up vast new opportunities for investment in infrastructure and public services. The Cameron government had to cope with the aftermath of the great recession and lived in fear of being heavily in debt if real interest rates went up.
No such fear need trouble Boris. If the Government issues more 30-year bonds it will not matter if interest rates go up in the future. For every 30-year bond valued at £100 the Government will receive £107. In 30 years, it will have to pay back £100 and in each year it will pay nominal interest of 1.5
Comments
Join the debate for just $5 for 3 months
Be part of the conversation with other Spectator readers by getting your first three months for $5.
UNLOCK ACCESS Just $5 for 3 monthsAlready a subscriber? Log in