Pressed on whether another round of interest rate increases would be unhelpful for mortgage payers, Mr Swinney said: “Of course, borrowing comes at a cost.
“But if borrowing is undertaken in a sustainable environment, there is no reason why that cannot be supported by the public finances.”
He argued that more borrowing was needed as the scope for more taxation “gets narrower and narrower.”
Stealth tax
Mr Swinney also argued that infrastructure projects such as the Queensferry Crossing should be added to the Government’s balance sheet for borrowing purposes as they generate an “economic value of Scotland”.
The First Minister also refused to rule out using December’s Scottish Budget to impose a stealth tax on workers for the fourth year running.
SNP ministers in recent years have held the salary threshold at which Scots start to pay the higher rate of income tax at £43,662, rather than increasing it by inflation.
This has meant thousands of people receiving annual pay rises are either dragged into the 42 per cent higher rate or have their bills go up if they are already above the threshold.
Mr Swinney refused to rule in or out doing this again this year, arguing that the Scottish Government’s tax and spending plans could not be finalised until after next week’s UK Budget.
Asked if he accepted whether freezing thresholds would in effect be raising taxes on workers, Swinney replied: “Obviously there will be some people that are impacted as a consequence of that, yes.”
