Reeves to confirm debt rule change to release £50bn for infrastructure

Rachel Reeves will announce at the International Monetary Fund a plan to change Britain's debt rules and open the door for the government to spend up to £50bn extra on infrastructure projects.

- Larry Elliott Pippa Crerar Richard Partington

After weeks of speculation, the chancellor will confirm today at the fund's annual meeting in Washington that next week's budget will include a new method for assessing the UK's debt position - a move that will permit the Treasury to borrow more for long-term capital investment.

The change will be welcomed by the IMF, which says spending on UK infrastructure projects should be ringfenced as the government seeks to repair the damage to the public finances caused by the pandemic and the cost of living crisis.

Reeves will not specify while in Washington which of the various debt measures under consideration has been chosen but the Guardian has been told by a senior government source that she will target public sector net financial liabilities (PSNFL).

This yardstick - which will replace public sector net debt - will take into account all the government's financial assets and liabilities, including student loans and equity stakes in private companies, as well as funded pension schemes. This would give the chancellor room to increase borrowing for investment in long-term infrastructure.