Chancellor Rachel Reeves plans borrowing rule changes in first budget to boost investment

Chancellor Rachel Reeves plans to change borrowing rules in her first budget on October 30. This change aims to increase investment spending to boost economic growth, addressing a decade of stagnant living standards. The government faces a £40 billion funding gap, requiring tax increases, spending cuts, or both. Reeves may raise employer national insurance contributions to help close this gap, despite potential political backlash. Reeves intends to redefine how government debt is measured, allowing for up to £50 billion in additional borrowing for public investment. This strategy could support long-term growth but risks unsettling financial markets amid rising government debt.