The UK could find it harder to convince investors to buy its debt in the years ahead, the head of the office that issues the government’s bonds has said.
The next couple of years could potentially be a “little more challenging” because of rising interest rates, Robert Stheeman told the BBC.
Investors may be more “reticent” to buy British debt, he suggested.
The UK’s net public debt stands at £1.21 trillion, which is equivalent to 75.9% of the entire economy.
Mr Stheeman, who is chief executive of the Debt Management Office, told the BBC: “It’s not so much the rate that we issue, it’s more the direction and the movement of rates.
“So if you think as an investor, if you’re buying debt from us ultimately and you know rates are declining, you also know that the value of your investment is rising.
“If however, you’re buying debt and you think rates will rise even further in the next weeks or months afterwards, you might be a little bit less eager to put your money on the table and purchase our debt. So I think the investor base might at times be a little more reticent than perhaps it has,” he said.
“However, I do believe that the market and the efficiency of the market will help us in that task.”
No-one believes we are out of the woods completely in terms of the whole economic situation”
The UK’s debt burden soared during the financial crisis which began in 2007 and gathered pace in 2008.
Within a year the UK’s annual borrowing requirement rose from around £60bn to £220bn, putting a strain on Mr Stheeman’s office.
It was used to conducting a debt auction once every two or three weeks, but suddenly it had to organise auctions two or three times a week.
“At that time it was not obvious that the market was going to allow us to raise that sort of money as smoothly as it did,” he said.
The UK economy is recovering from the damage caused by the financial crisis, but investors in UK debt are still cautious.
“No-one believes we are out of the woods completely in terms of the whole economic situation,” he said.
“I certainly don’t get that message at all from the Treasury.
“To be fair, colleagues in the Treasury are very much aware of the challenges that we face here daily when we face the market.”
Many economists were surprised by the strength of the UK economic recovery in 2013.
Last month, the Office for Budget Responsibility (OBR) raised its forecast for 2013 growth to 1.4% from the 0.6% it had predicted in March.
This year the OBR expects growth of 2.4%.