Healey urged to be bold on borrowing in first test of Burnham’s growth pledge
📰 source: theguardian_business · 📚 research
new chancellor john healey has 12 weeks to deliver his first budget, and economists are pushing him to borrow more aggressively. he needs to cover andy burnham's vat cut on energy bills and fill a £5bn gap in defence investment left by rachel reeves. reeves bequeathed him £24bn of headroom against fiscal rules, but that may be eroded by the iran war's impact.
one option is to exploit the new 'persnuffle' definition of debt, which lets extra borrowing count if it funds financial assets. the resolution foundation says public financial institutions could borrow an extra £9bn a year without breaching rules. others suggest letting public corporations borrow directly from markets, though the treasury has historically blocked that.
healey's choice will be an early test of how radical burnham's administration is on infrastructure and housing investment.
why it matters: uk's new chancellor weighs aggressive borrowing to boost growth, a choice that will sway gilt markets and infrastructure spending.
source: theguardian_business
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