Scottish Budget 2025 to 2026: Scottish Government borrowing

Technical Annex

• This forecast assumes continued use of the existing National Loans Fund structures as the source of borrowing, this will continue to be the case until any changes to borrowing sources or structures are certain to occur.
• For these reasons, regular repayment of principal repayments will continue to be included in the resource cost of borrowing and reflected in budget and spending review forecasts.
• Inflationary uplifts are calculated on the basis of UK GDP deflators published by the Office for Budget Responsibility (30/10/2024) and applied to the 2023-24 baseline limits in line with the revised Fiscal Framework Agreement.
• Interest rate assumptions use Gilt curves (25/11/2024) adjusted for National Loans Fund annuity structures. A further premium of 50 basis points is added for prudence to reflect the volatility in both forward rates, and the feasible differential between date of request of funds and date of receipt when interest rates are applied.
• The Scottish Government will not speculate on the future interest rate attached to any potential bond issuance.