PRESS: UK to boost business and infrastructure banks by GBP20 billion
(Alliance News) - UK Chancellor John Healey is preparing to announce GBP20.4 billion in additional funding for the country's state-backed business lender and infrastructure bank in next week's Budget, the Financial Times reported on Saturday.
The funding, to be provided over roughly five years, is expected to create and support 100,000 jobs in sectors including artificial intelligence, defence and green energy by 2035, according to the Treasury.
The National Wealth Fund will receive an additional GBP15.4 billion, allowing it to maintain its current lending rate until the 2030-31 financial year. This includes GBP2.0 billion for a renewables-focused Energy Wealth Fund.
Meanwhile, the British Business Bank will receive GBP5.0 billion, increasing its financial capacity to GBP30.6 billion from GBP25.6 billion.
According to the FT, the government plans to finance the additional investment through borrowing while taking advantage of flexibility in its fiscal rules.
The Treasury said the borrowing would be neutral for public sector net financial liabilities, as the financial assets created by the investments would offset the additional liabilities.
A Treasury spokesperson said: "This additional capital will help more British businesses fulfil their potential, while getting investment behind the industries, infrastructure and places that create good jobs and drive lasting growth across the country."
The announcement is expected as part of Healey's Budget on Wednesday, October 28, amid pressure on public finances from higher borrowing costs linked to the Iran war.
The FT also reported that the Budget is expected to include measures to ease household energy costs, support businesses through tax changes and deregulation, and strengthen Britain's AI capabilities.
Healey is expected to maintain fiscal discipline while targeting additional support towards households and businesses facing higher costs, the newspaper added.
By Eva Castanedo, Alliance News senior economics reporter
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