§ Mr. Malcolm BruceTo ask the Chancellor of the Exchequer what is his estimate of the savings to the Exchequer which would result from lower debt interest costs if United Kingdom interest rates were(a) 0.5 per cent., (b) 1.00 per cent. and (c) 1.5 per cent. lower across the yield curve for (1) 1997–98, (2) 1998–99, (3) 1999–2000, (4) 2000–01 and (5) 2001–02. [814]
§ Mr. Waldegrave[holding answer 31 October 1996]: Estimated reductions in central Government net debt interest payments resulting from lower interest rates are presented in the table.
Savings made from stated reduction in interest rates (£ billion) 0.5 per cent. 1.0 per cent. 1.5 per cent. 1997–98 0.3 0.6 0.9 1998–99 0.5 0.9 1.3 1999–00 0.5 1.1 1.6 2000–01 0.6 1.2 1.7 Such estimates are dependent on the assumed path of Government borrowing. These figures are calculated using the Budget 1995 forecast for borrowing and assume the fall in interest rates in sustained throughout the forecast period.
Revised short-term projections for Government borrowing were produced in the "Summer Economic Forecast 1996". Estimates based on this forecast are not significantly different from those shown.
No borrowing forecasts have been published for 2001–02.