In his Autumn Statement today he said: “Just a 1% rise in our market interest rates would add £10bn to mortgage bills every year.
“1% would mean the average family with a mortgage would have to pay £1,000 more.”
Osborne said the UK was paying less than 2.5% on 10-year gilts while Italy was paying 7.2%.
He added: “Last April, the absence of a credible deficit plan meant our country’s credit rating was on negative outlook and our market interest rates were higher than Italy’s.
“Eighteen months later and we are the only major western country which has had its credit rating improve. Yesterday, we were even borrowing money more cheaply than Germany.”
Osborne added that the cost of slowing down Britain’s debt-cutting plan would risk pushing up the rates we have to pay.
He added: “Italy’s rates have gone up by almost 3% in the last year alone. We will not take this risk with the solvency of the British economy and the security of British families.”
Osborne said the debt interest paid by this government was £22bn less than predicted as a result of low rates.
