Britain could release loans barring BoE losses, Reuters Guardian reports

LONDON (Reuters) – British Chancellor of the Exchequer Rachel Reeves is likely to free up 10-20 billion pounds ($13.1 billion-$26.2 billion) of borrowing space for capital investment by changing the definitions technicalities underpinning the government’s tax rules, The Guardian reported. Tuesday.

Reeves will present Labour’s first budget on October 30 since it came to power in a July election, promising that Britain’s economy will grow faster through careful fiscal management and government spending on infrastructure that has encouraged more investment from the private sector.

The Guardian reported, citing unnamed allies of Reeves, that it was likely to exclude government losses from previous Bank of England asset purchase programs from how the debt was calculated.

Reeves would also rule out any additional borrowing used to establish new public institutions, the report said.

Last month, she suggested she would give the government more freedom to borrow, but did not outline how she would do that. Economists see a range of options and the Treasury has not indicated a preference.

The possibility of a bigger loan has caught the attention of financial markets, given Britain’s already high debt levels and dire warnings from Reeves about the health of the public finances her government inherited.

The Treasury did not immediately respond to a request for comment on the report.

($1 = £0.7634)