Overview
- Officials were reported on Wednesday to be examining whether changes to the fiscal framework could allow the Treasury to raise billions more in borrowing for targeted investment.
- The Resolution Foundation estimated scaling the National Wealth Fund could free about £9 billion a year for investment by 2031 by treating equity stakes and infrastructure as counted assets.
- Analysts and officials say new funds could be channelled through institutions such as the British Business Bank, the National Wealth Fund and a proposed National Housing Bank to lend, invest or take equity stakes.
- Ministers including Chancellor John Healey and Prime Minister Andy Burnham have signalled interest in using the flexibility while the Treasury says firm decisions will be announced at fiscal events and at the October 28 budget.
- Investors are watching for confirmation because UK gilt yields are already high versus other G7 nations, which means signals on timing and scale could affect borrowing costs and market confidence.