§ Mr. LawsTo ask the Chancellor of the Exchequer what estimate he has made of debt interest payments by central Government in(a) 2001–02 and (b) 2002–03; what effect there has been on these forecasts as a consequence of the new forecasts for interest rate levels as set out in the November 2001 pre-Budget report; and if he will make a statement. [20338]
§ Mr. Andrew SmithThe latest forecast for Central Government Gross Debt Interest payments, and the change since the Budget, for 2001–02 and 2002–03 can be found in the pre-Budget report in tables B13 and B14, pages 182 and 184, respectively. The changes in the forecast for 2001–02 and 2002–03 are due to lower assumed interest rates and the impact the lower rates have on the forecast for RPI affecting the accrued up-lift on index linked gilts
Interest rate assumptions used in public finance forecasts are audited by the National Audit Office. For the PBR the interest rate assumptions were based on market expectations as of 19 November 2001.