Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your experience. Save up to 40% More details

UK's Sunak looking at ways to relax spending limit

EconomyMar 08, 2020 08:04AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
© Reuters. FILE PHOTO: Newly appointed Britain's Chancellor of the Exchequer Rishi Sunak leaves Downing Street in London

By William Schomberg and Kylie MacLellan

LONDON (Reuters) - British finance minister Rishi Sunak, under pressure to fund the fight against the coronavirus and meet election promises in this week's budget, has said he is looking at possible changes to rules which could allow him to spend more.

Sunak told the Sunday Telegraph newspaper he was studying "with interest" proposals to reclassify some government spending as investment as he puts the finishing touches Britain's first post-Brexit budget on Wednesday.

Such a change would give him more room for maneuver with spending on public services, including on health.

Wednesday's budget was originally billed as a chance for Prime Minister Boris Johnson, fresh from December's election triumph, to begin to meet his promise to "level up" Britain's struggling regions.

But the focus on the spread of the coronavirus means it will delay announcing full details of its plans for new railways, roads and other infrastructure investment.

In interviews on Sunday, Sunak repeatedly declined to confirm that he would stick with the fiscal rules set by his predecessor Sajid Javid who came under pressure from Johnson's advisors to spend more.

But the 39 year-old former Goldman Sachs (NYSE:GS) banker who has been in his job for less than a month, said he was not about to abandon the discipline of previous Conservative Party finance ministers whose tight grip on spending slashed Britain's budget deficit since the global financial crisis.

"That means I can sit here today and say I will invest what it takes to get us through this," he told BBC television, referring to the coronavirus outbreak.

Sunak said he would offer help to companies suffering short-term cash-flow problems and he was in touch with Bank of England Governor Mark Carney about the possible economic hit.

The BoE has said it needs to see more evidence before of the virus' impact before cutting interest rates like the U.S. Federal Reserve. Other options include reviving incentives for bank lending to companies.


Sunak has been expected to relax a limit on day-to-day spending which was set by Javid before he unexpectedly quit last month after a row with Johnson over advisors.

The toughest of those rules is a pledge to balance so-called current spending with tax revenues within three years.

Media reports have said Sunak might reclassify some public spending on health and education services as investment which is subject to a less restrictive rule, avoiding cuts to other services or tax increases.

Sunak told the Sunday Telegraph he wanted "lower rates of tax" during his time in office.

He said he was looking at objections to transaction taxes such as Britain's stamp duty which is applied to the purchase of properties, suggesting it could be changed in a future budget.

Sunak also said there was no need to extend the Brexit transition period, which is due to end on Dec. 31, describing the coronavirus as a short-term challenge.

Asked about Johnson's "leveling up" plans, Sunak said he would launch a review of the way that public investment decisions are taken, which critics say favors London and the south, and he said a fifth of finance ministry staff would eventually work in northern England.

UK's Sunak looking at ways to relax spending limit

Related Articles

Erdogan says he hopes Turkish lira will steady soon
Erdogan says he hopes Turkish lira will steady soon By Reuters - Dec 04, 2021

ISTANBUL (Reuters) - Turkish President Tayyip Erdogan said on Saturday he hoped that foreign-exchange rates would stabilise shortly and again promised low interest rates, after a...

Pakistan receives $3 billion loan from Saudi Arabia
Pakistan receives $3 billion loan from Saudi Arabia By Reuters - Dec 04, 2021

By Syed Raza Hassan KARACHI, Pakistan (Reuters) - Pakistan on Saturday received a $3 billion loan from Saudi Arabia, the prime minister's finance adviser said, as part of an...

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at’s discretion.

Write your thoughts here
Are you sure you want to delete this chart?
Post also to:
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
Sign up with Email