RACHEL Reeves sparked fears of mortgage rate pain last night after ripping up her debt rules.
The Chancellor is to change how national debt is measured to give her up to £50billion more to play with at next week’s Budget.
Chancellor Rachel Reeves has sparked fears of mortgage rate pain[/caption]
She is set to change how national debt is measured to give her up to £50billion more to play with[/caption]
It will let her embark on a borrowing spree to fund manifesto pledges while still claiming to have met her promise to have debt falling in five years’ time.
But the financial fiddling risks spooking the markets and government borrowing costs increased yesterday.
Shadow Chancellor Jeremy Hunt said the move could keep interest rates higher for longer and wreak more misery on remortgaging homeowners.
He said: “The consistent advice I received from Treasury officials was always that increasing borrowing meant interest rates would be higher for longer — and punish families with mortgages.
“What’s even more remarkable is that the Chancellor hasn’t seen fit to announce this major change to the fiscal rules to Parliament. The markets are watching.”
Ms Reeves aims to count the value of assets — as well as their costs — in her revamped fiscal rules.
She confirmed during a trip to Washington she will make the long-expected tweaks at next week’s Budget.
Ms Reeves said the change would free up cash to invest in “things that deliver a long-term return for our country” and help bring down debt as a share of the economy “during this parliament”.
Sir Keir Starmer denied the Budget, with its expected tax rises, would push entrepreneurs to leave Britain.
He added that investors “shouldn’t be worried”.
