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The government’s ability to play with the public finances is limited by the so-called fiscal rules it has set for itself. <\/p>\n
So, if it needs more money to pay back higher borrowing costs, it has less to spend on other things (under its self-imposed rules).<\/p>\n
The possibility now looms of less support for households struggling with the cost of living, or of tax rises to pay for any support.<\/p>\n
Importantly, these are choices \u2013 not certainties \u2013 so the chancellor might free up some money by spending less elsewhere.<\/p>\n
Some may be wondering about the impact of higher gilt yields on the mortgage market, particularly after what followed Liz Truss’s mini-Budget in September 2022.<\/p>\n
Analysts believe that mortgage rates could go up on new fixed deals, as funding costs for lenders rise. But this is very different to 2022, when they shot up over a couple of days. <\/p>\n
That speedy rise led to lenders quickly pulling deals while they tried to work out what interest rate to charge.<\/p>\n
However, the market could be more favourable to anyone currently buying an annuity – a product from an insurance company that gives a retirement income for the rest of their life, bought only once.<\/p>\n<\/div>\n