LONDON (Reuters) -British finance minister Rachel Reeves will change how the government assesses the public finances to free up room for billions of pounds of extra capital spending, The Guardian newspaper reported on Wednesday.
The report cited a senior government source as saying that Reeves would target a measure known as public sector net financial liabilities (PSNFL), replacing the current target of public sector net debt excluding the Bank of England.
Reeves will deliver the new Labour government’s first budget on Oct. 30. The Guardian said she would announce her intention to change the debt rule during a trip to the International Monetary Fund in Washington this week, but would not set out the details of the change there.
The Treasury had no immediate comment on the report.
Reeves has been widely expected to change the debt measurement rule, but with a range of options for doing so economists’ expectations of how much extra borrowing this could permit have varied widely.
The Institute for Fiscal Studies think tank estimated that if the PSNFL metric had been used at a budget held in March, the then-Conservative finance minister, Jeremy Hunt, would have had an extra 53 billion pounds ($68.50 billion) to borrow without breaking the fiscal rules.
($1 = 0.7738 pounds)
(Reporting by William James; Editing by Leslie Adler and Sandra Maler)
