Record debt and higher interest rates set to double government borrowing costs by 2025

JH Sovereign Debt index

Valeria Martinez
clock • 3 min read

Record government debt and soaring borrowing costs are set to put a significant strain on taxpayers and public services, but these challenging market conditions present opportunities for investors.

According to the Janus Henderson's Sovereign Debt index, published today (4 May), global government debt rose 7.6% to a record $66.2trn in 2022, while higher interest rates meant government borrowing costs jumped 20.9% at the fastest rate since 1984. The interest paid on sovereign debt reached a record $1.4trn last year and is set to double in the next three years. By 2025, the effective interest rate paid on government borrowing will rise from 2.2% in 2022 to 3.8%. This will cost an additional 1.2% of GDP, the firm said. British Business Bank plans 'sovereign growth fund' ambitions -...

To continue reading this article...

Join Investment Week for free

  • Unlimited access to real-time news, analysis and opinion from the investment industry, including the Sustainable Hub covering fund news from the ESG space
  • Get ahead of regulatory and technological changes affecting fund management
  • Important and breaking news stories selected by the editors delivered straight to your inbox each day
  • Weekly members-only newsletter with exclusive opinion pieces from leading industry experts
  • Be the first to hear about our extensive events schedule and awards programmes

Join now

 

Already an Investment Week
member?

Login

More on Bonds

Refinitiv's Dewi John: Lifting the lid on strategic bond performance

Refinitiv's Dewi John: Lifting the lid on strategic bond performance

Defaults creeping up but are still relatively low

Dewi John
clock 12 July 2024 • 4 min read
M&G's Jim Leaviss on three decades in bonds: 'An incredible puzzle', scary times and embracing the arts

M&G's Jim Leaviss on three decades in bonds: 'An incredible puzzle', scary times and embracing the arts

Bringing bond investing to a broader audience

Katrina Lloyd
clock 10 July 2024 • 7 min read
'Clarity and stability': What investors can expect from the incoming Labour government

'Clarity and stability': What investors can expect from the incoming Labour government

Following ‘supermajority’ win

Cristian Angeloni
clock 05 July 2024 • 5 min read
Trustpilot