UK faces highest debt interest costs in developed world

10.4% of total government revenue

The UK faces the highest debt interest bill in the developed world this year, according to Fitch Ratings, due to its high proportion of inflation-linked debt.

Britain will spend 10.4% of total government revenue servicing its debts in 2023, Fitch has forecast, at a total of £110bn. Interest payments on a 12-month basis reached £117bn in May 2023, double the level in the period to September 2021.  This reflects the high proportion of inflation-linked debt in the UK, Fitch said, which sped up the pass-through from inflation to interest costs despite the long average maturity of government debt.  Inflation index-linked debt accounted for almost 25% of UK government debt stock in 2023. The next largest issuer of inflation-linked debt among t...