Infrastructure taskforce to help chancellor avoid financial sector turmoil. Rachel Reeves is to seek advice from City experts to ensure big projects’ value for money and reassure markets.
Rachel Reeves, the chancellor, is taking action to ensure her budget plan for a multibillion-pound increase in government borrowing to fund infrastructure projects avoids a Liz Truss-style meltdown in financial markets.
Ahead of her tax and spending event
Ahead of her tax and spending event on 30 October, the chancellor is convening on Friday the first meeting of a taskforce of leading City figures to advise on infrastructure projects.
The government will also launch a watchdog to oversee public works and ensure value for money for the taxpayer.
It is understood Reeves is preparing to announce changes in the budget to the Treasury’s self-imposed fiscal rules to pave the way for billions of pounds in additional borrowing to finance major public works including roads, railways, schools and hospitals.
Infrastructure taskforce to help chancellor avoid financial sector turmoil
Financial markets expect the chancellor to change her definition of the national debt to unlock up to £57bn of headroom against her self-imposed fiscal rules. Analysts at Goldman Sachs expect she could use the space to increase borrowing by £10bn-£20bn a year.
The chancellor on Friday will convene the first meeting of the British Infrastructure Taskforce, a new group involving some of the UK’s biggest City institutions – including HSBC, Lloyd’s and M&G – to advise on its plans.
Sources close to the Treasury said the government understood that if it was going to add to borrowing, it needed to be clear with the public, parliament and the markets that what it was doing was sensible.