There are only two numbers that matter in the UK’s dire economic plight

In the ancient history of the pre-Covid world, keen students of fiscal matters may remember that Sunak’s predecessor Sajid Javid set a new rule putting a 6pc cap on the cost of debt interest as the Government readied itself to fund an extra £120bn in investment over the course of the parliament in an “infrastructure revolution”.

Even in the morass of red ink flooding over the numbers today, the fact that the Chancellor still has such room for manoeuvre against his own target should be a comfort for both him and a Prime Minister looking to get back on the front foot when the virus is eventually tamed.

In these turbulent times, risk aversion among investors is such that they were even willing to pay to lend to Her Majesty’s Government this week. The £3.8bn bond auction was a watershed moment, as they paid so much over the odds that the interest payments and principal won’t cover the outlay if buyers hold them to maturity.

Sunak is borrowing massively, and the UK’s debt to GDP ratio is clearly heading towards three figures, as the Bank of England’s chief economist Andy Haldane pointed out this week. But this hardly matters when investors are good for the cash, and the Bank of England is – for now at least – in the market as a major buyer, snapping up gilts faster than the Debt Management Office can issue them.

Concerns over the Bank’s effective monetary financing of the deficit have some validity, even if Threadneedle Street protests that it doesn’t buy them directly from the Government. But in these extraordinary times, the question over when the gilt market is big enough to stand on its own two feet is one for another day.

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