Chagos Islands: Sovereignty
The question
To ask the Secretary of State for Foreign, Commonwealth and Development Affairs, with reference to the answer of 8 January 2026 to Question 101383 on Government Actuary’s Department: Freedom of Information, what is the basis by the Government Actuary's department for the GDP deflator rate being assumed to be 2.3% from year 5 to year 99 of the Chagos agreement; and what assessment has been made of whether it reflects the market assumptions for inflation over that period reflected in gift yields.
Answered by Treasury
The inflation rate applied to the calculation at the time of signature was the forecast GDP Deflator from the March 2025 Economic and Fiscal Outlook Report by the Office for Budgetary Responsibility (OBR); the discount rate applied was the Social Time Preference Rate (STPR) in the Green Book. OBR confirmed independently that these are reasonable rates to apply.
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