Treasury slaps 1% interest on PWLB borrowing

The Treasury has put a 1% surcharge on interest rates from the £95bn Public Works Loan Board, threatening development projects across the country. It said the increased prudential borrowing rates would apply to all new loans with immediate effect. The PWLB is the main source of local authority borrowing, with lower interest rate loans for construction and maintenance projects. The hike will see the rate rise to 2.85% for a new 50-year maturity loan. In a letter to the chief finance officer, the Treasury said: “Some local authorities have substantially increased their use of the PWLB