UK Chancellor Rachel Reeves to Announce Major Fiscal Rule Changes Allowing £70 Billion Borrowing for Investment

Oct 24, 2024, 02:14 PM

UK Chancellor Rachel Reeves is set to announce a significant change to the country's fiscal rules in her upcoming budget. The new rules will allow the government to increase borrowing by up to £70 billion for public investment, particularly in infrastructure projects. This move is aimed at reversing the decline in public investment and supporting economic growth. Reeves confirmed that the changes will be announced at the International Monetary Fund meetings in Washington. The fiscal rule changes will target public sector net financial liabilities and are expected to provide stability and boost investment. The Chancellor emphasized that the increased borrowing will not be used for day-to-day spending or tax giveaways but will focus on long-term capital projects. Former Chancellor Jeremy Hunt has criticized the plan, warning that it could punish families. The announcement has already led to a rise in the UK's borrowing costs. Reeves aims to maintain public investment at 2.5% of GDP.