Britain's Sunak says higher interest rates could lift cost of repaying govt debt -report

FILE PHOTO: Britain's Chancellor of the Exchequer Rishi Sunak leaves Downing Street, in London, Britain, November 25, 2020. REUTERS/Simon Dawson

(Reuters) - British minister Rishi Sunak expressed concern that higher interest rates might one day jack up the cost of servicing government debt, in comments published on Sunday.

Government borrowing must be held in check as record low interest rates were not fully understood, he told City AM’s The City View podcast, which was reported by The Telegraph newspaper.

“We should have some humility about saying what we think will happen,” Sunak was quoted as saying in the report.

Interest rates in Britain currently stand at a record low 0.1%.

The minister said he had a duty to manage the public finances in a way that was “sustainable over time,” according to the report.

Sunak launched a 4.6 billion pound ($6.2 billion) support package for businesses on Tuesday to soften an expected recession caused by a surge in COVID-19 cases that has triggered a third national lockdown.

He has previously announced emergency help for the economy worth 280 billion pounds, including a massive job protection scheme that will run until the end of April.

Reporting by Derek Francis in Bengaluru and Andy Bruce in London; Editing by Daniel Wallis