Rachel Reeves has made a significant change to the UK government's debt rules, allowing for more flexibility in long-term infrastructure spending, reflecting an investment-friendly approach.
The chancellor's announcement at the IMF meeting demonstrates a proactive stance in addressing bond market concerns, while also aligning with the IMF's endorsement of investment-focused borrowing.
Unlike New Zealand, which considers both liabilities and assets to bolster fiscal health, Reeves has opted for a tighter measure focusing solely on public sector net financial liabilities.
The potential introduction of a supplementary net worth target could reshape the government's investment mentality, encouraging a broader view of how infrastructure spending can benefit the economy.
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