Good morning. Rachel Reeves, the chancellor, is set to reveal Labour’s first budget next week. Budget announcements are now spread out over two weeks to avoid surprising the markets on the day. One of the key measures being discussed is the possible change in the official definition of debt used in the government’s fiscal rules. Reeves is expected to confirm this change at a meeting of the IMF in Washington today.
The current government aims to have debt falling as a share of national income in the fifth year of the economic forecast. Previously, debt was defined as headline public sector net debt (PSND), but under Rishi Sunak’s chancellorship, it was changed to underlying PSND, excluding the Bank of England’s liabilities. Reeves is considering using public sector net financial liabilities (PSNFL), which would include all government financial assets and liabilities, providing more borrowing room for long-term infrastructure investment.
Despite concerns about scaring investors with the debt definition change, Keir Starmer reassured that the budget will be pro-business and prioritize growth. He emphasized the positive response from investors to the government’s plans and highlighted the significance of their first budget in outlining their approach to economic policy.
In addition to the budget update, the day’s agenda includes Pat McFadden taking questions in the Commons, a Downing Street lobby briefing, a speech by Angela Rayner to the Local Government Association, and Rachel Reeves giving broadcast interviews at the annual IMF meeting in New York. The football governance bill is also being introduced in the House of Lords today.
If you have any messages or urgent matters to flag, feel free to reach out via social media. Reader feedback, including corrections and questions, is highly valued and appreciated. Keir Starmer is currently attending the Commonwealth summit in Samoa, representing the UK government.
Photograph: Stefan Rousseau/PA
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