UK Chancellor Rachel Reeves (pictured) is expected to announce a widening of the limits on how much the country can borrow at the International Monetary Fund (IMF) annual meeting in Washington today.
In a speech to world finance ministers, Reeves will also promise an economic “reset” for the country.
“A Britain built on the rock of economic stability is a Britain that is a strong and credible international partner,” she will say.
“It’s from this solid base that we will be able to best represent British interests and show leadership on the major issues like the conflicts in the Middle East and Ukraine.”
Reeves is being tipped to unveil big tax rises in next week’s Budget plus an increase in borrowing to fund a £50 billion public sending programme.
To give more flexibility on debt, Reeves is expected to announce that going forward public sector net financial liabilities (PSNFL) will be used as a debt measure, replacing the existing measure of public sector net debt.
This boosts the asset side of the government’s balance sheet by including all financial assets and liabilities and giving more leeway to leverage this higher number for ‘investment’.
IMF’s chief economist Pierre-Olivier Gourinchas cautioned that countries should not do “too much too quickly” to tax and spending decisions to maintain stability.