Rishi Sunak might have wished he maintained the Today Programme boycott this morning as Martha Kearney asked a line of questions from the right, accusing the Chancellor of being more like Gordon Brown than Margaret Thatcher with his high spending, high borrowing and high taxing. Ooof…

Rishi defended the new borrowing and spending splurge on the grounds that the cost of borrowing is now lower than when the debt was less because interest rates are lower. The graph above is of the nominal forward curve derived from the government gilt market – which is how the government borrows. It does indeed look extremely cheap to borrow. The two curves show how the yield curve moved yesterday, some 50 basis points at the long end or half-a-percent in a day following the base rate cut. In the event of an inflationary economic shock, borrowing costs could very easily go the other way, much faster and much further. The government has to regularly refinance tranches of the £2 trillion national debt.

To argue that because interest rates are now cheap it is safe to borrow more than ever before, with a rising debt to GDP ratio unprecedented outside wartime, is reckless. To argue as Rishi now does that he can confidently forecast rates 30 years from now, when only 5 years ago Rishi himself was confidently forecasting that the government would now be paying down the debt, seems panglossian.