>> And as the borrowing is long term, it wont always be at todays rates.
Government issues bonds. The rate is the rate. Yields are up a bit from August, when 10 year money was cheaper than 2 year, but the 10yr yield is still 0.7%. 50 years is 1.2%.
I don't know what the limit is in terms of how much issuing the market will bear at these rates but if it is for something with a prospect of a pay back it could be quite successful. The reason returns are so low is that investors are reluctant to invest any more in almost everything else.
The Tories are also basing promises on issuing more debt, and they propose lower taxes. Both parties say they will take advantage of low rates. The borrowing requirement might not be so different.
When Javid talks about the flood of private capital following Brexit, my blood runs cold. He doesn't mean private capital for private enterprise, he means private capital to fund public services. This is how they sell the NHS and other public services, not by selling it lock stock and barrel but by allowing their cronies to provide an increasing proportion of services. The profit potential for them is vast and will be paid by us, leading to a higher PSBR in the future - just like PFI, which, to be fair, New Labour exploited also after the Tories 'invented' it.
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