Chancellor Rachel Reeves faces a significant challenge with the UK's high government borrowing costs, which at roughly £135billion a year on £3trillion of national debt exceed those of every other G7 nation. Columnist Alex Brummer argues this is not simply a legacy of the 2022 "moron premium" blamed on Liz Truss, but stems from deeper structural problems at the Treasury, the Debt Management Office and the Bank of England, which if addressed could ease pressure to raise wealth and bank taxes to fund priorities such as defence spending.

Britain's ten-year gilt yield exceeds 5.2 per cent and the 30-year bond hit 5.9 per cent, higher than the US, Japan, France and Italy despite those countries carrying heavier debt or deficit burdens. Contributing factors include nearly a quarter of UK debt being linked to the discredited Retail Prices Index (versus just 9.1 per cent in France), an unusually long average debt maturity of 14 years, and the Bank of England's decision to actively sell back its £558billion gilt holdings rather than hold them to maturity as other central banks do, adding to market supply pressures.