Chancellor Rachel Reeves has pledged that all day-to-day spending should be funded from taxes, not from borrowing.
But if she needs more money to pay back higher borrowing costs, that uses up more tax revenue, leaving less money to spend on other things.
Economists have warned that this could mean spending cuts which would affect public services, and tax rises that could hit people's pay or businesses' ability to grow and hire more people.
The government has committed to having only one fiscal event a year, where it can raise taxes, and this is not expected until the autumn.
So if higher borrowing costs persist, we may be more likely to see cuts to spending before that or at least lower spending increases than would otherwise happen.
Some people may be wondering about the impact of higher gilt yields on the mortgage market, particularly after what happened after Liz Truss's mini-Budget in September 2022.
