UK likely to free up borrowing by excluding BoE losses, Guardian reports
2024.10.08 18:03
LONDON (Reuters) – British finance minister Rachel Reeves will likely free up 10 billion to 20 billion pounds ($13.1 billion – $26.2 billion) worth of room to borrow for capital investment by tweaking the technical definitions that underpin the government’s fiscal rules, the Guardian reported on Tuesday.
Reeves will present the Labour Party’s first budget on Oct. 30 since it swept to power at an election in July, promising to get Britain’s economy growing more quickly through careful fiscal management and state spending on infrastructure that encouraged more private-sector investment.
The Guardian reported, citing unnamed allies of Reeves, that she was likely to exclude the losses incurred by the state from the Bank of England’s past asset-purchase programs from the way debt was calculated.
Reeves would also exclude any extra borrowing used to set up new public institutions, the report said.
Last month, she suggested she would give government more leeway to borrow, but has not set out details of how she would do that. Economists see a range of options, and the Treasury has not indicated a preference.
The possibility of higher borrowing has attracted the attention of financial markets given Britain’s already-high debt levels and dire warnings from Reeves about the health of the public finances her government inherited.
The Treasury did not immediately respond to a request for comment on the report.
($1 = 0.7634 pounds)
