WASHINGTON: British finance minister Rachel Reeves will change the measure of public debt that the government targets in next week's budget to allow billions of pounds of more borrowing for investment, she said on Thursday .
"We will get debt falling as a share of our economy during this parliament, but the changes that we will make to the investment rule will free up money to invest in things that will deliver a long-term return," she added. On Wednesday the Guardian newspaper reported that Reeves would target public sector net financial liabilities, which allow assets such as student loans to be offset against public debt.
"The consistent advice I received from Treasury officials was always that increasing borrowing meant interest rates would be higher for longer," he said. On Thursday the IMF's deputy director for Europe, Helge Berger, said the Fund would want to study the details of Reeves' changes before passing judgment.
If Reeves' new rule requires debt to fall by the next election due in 2029, that would represent a tighter requirement than current rules based on rolling five-year periods which allow deadlines to be pushed back each year.