High inflation will not help Britain's public finances in the same way as in the past because government debt is now more sensitive to changes in interest rates and prices, the chair of the Office for Budget Responsibility said on Friday.

Richard Hughes told the BBC that old notions of being able to inflate away high levels of public debt no longer applied.

The average effective maturity of British government debt had shortened from around seven years in 2008 to two years, Hughes said, meaning higher interest rates now feed into the cost of government debt faster than in the past.

This largely stems from the Bank of England's quantitative easing programme through which it effectively replaced longer-dated government bonds with very short-term central bank reserves, linked directly to the BoE's Bank Rate.

Secondly, around a quarter of Britain's government bond stock is linked to inflation - by far the highest share among major advanced economies - so the state increasingly compensates investors as consumer prices rise.

"What that means is that inflation rises don't actually help the public finances in our country in the way they used to," OBR Chair Hughes said.

"So higher interest rates, higher inflation, hit the public finances much more quickly, and mean that we start feeling the burden of as the interest rate rises much more immediately."

Britain in June had the highest rate of consumer price inflation among major advanced economies, at 8.7%.

"What we're seeing more recently is inflationary pressures becoming more embedded in the economy," Hughes said.

British inflation reached historic peaks during the mid-1970s and remained high through much of the 1980s. The headline measure of public sector net debt as a share of economic output fell during that time from around 49% to 22% in the early 1990s.

(Reporting by Andy Bruce; editing by William James and David Milliken)