Key facts
- Local government financing vehicles (LGFVs) are facing double-digit real borrowing costs.
- This indicates a significant increase in the cost of capital for these entities.
Rising interest rates and inflation have increased the cost of borrowing across various sectors. For local government financing vehicles, which are crucial for funding public infrastructure and services, higher borrowing costs can strain budgets and potentially delay or scale back projects. This trend reflects broader macroeconomic pressures impacting municipal finance.