Economist Julian Jessop says:

“Interest payments on central government debt jumped to £8.7 billion in June, largely due to the impact of rising inflation on the cost of index-linked gilts. The pick-up in inflation partly reflects the strength of the economic recovery and this could still be positive for the public finances overall. Nevertheless, rising interest rates are one of the downsides of higher inflation – and another reason for the Bank of England to end its policy of quantitative easing.”