LONDON, Aug 5 - Officials at Britain’s Treasury are examining whether flexibility within the government's fiscal rules could allow for raising additional borrowing worth billions of pounds, a media report said.
Finance minister John Healey told the newspaper there was "scope for more and more rapid investment." The report said the extra cash could be directed toward infrastructure projects, housing initiatives and assistance for businesses.
Changes to the fiscal framework introduced in 2024 by former finance minister Rachel Reeves included recognition of public sector assets when assessing the government's debt position. That adjustment opened up the theoretical possibility of higher public borrowing designated for investment.
Analysts cited in the report suggested any incremental borrowing might be channelled through government-owned agencies, naming the British Business Bank, the National Wealth Fund and the National Housing Bank as potential vehicles. The report added that a portion of the funds could be allocated to regional mayors, which would support the new Prime Minister Andy Burnham's agenda to devolve powers away from central government.
Andy Burnham, as quoted in the report, said last month he would use "any flexibility" within the fiscal rules but would maintain budget discipline.
Market context
Investors in British government debt are watching closely for signs that the new government will increase borrowing. Yields on gilts are currently the highest among bonds issued by Group of Seven nations, according to the report. The piece noted that long-dated gilts were little changed on Wednesday.
The report also referenced an assessment by the Resolution Foundation think tank, which concluded that boosting the scale of the National Wealth Fund could enable the government to invest an additional 9 billion a year by 2031.
Fiscal figures and official comment
The government borrowed a3128 billion in the 2025/26 financial year, the report stated. A finance ministry spokesperson was quoted as saying Healey was focused on boosting business and helping with the cost of living across the country. The spokesperson added: "As has always been the case, the Chancellor will set out decisions at fiscal events, rather than routinely commenting on rumour, speculation or proposals."
Healey is scheduled to deliver his first budget on October 28.