UK’s Reeves to change debt target to boost public investment

However, British government bonds underperformed against German and US debt on Thursday on speculation about a change in the budget rules, with the yield premium for 10-year gilts over Bunds increasing by 8 basis points.
Conservative former finance minister Jeremy Hunt – whose party suffered a heavy defeat to Labour in July – said on X that “markets were watching” Reeves’ plans.
“The consistent advice I received from Treasury officials was always that increasing borrowing meant interest rates would be higher for longer,” he said.
Asked what her message was to investors, Reeves said she was committed to borrowing only for long-term investment.
“It’s not to pay for day-to-day spending. It’s not to pay for tax giveaways. It’s to invest in things to get a long-term return for our country and for taxpayers,” she said.
“We will get debt down as a share of the economy,” she added.
Earlier this week, the IMF stressed the importance of Britain and other countries lowering debt, which it defines differently.