Sunak to investigate changing fiscal rules

FILE PHOTO: Newly appointed Britain's Chancellor of the Exchequer Rishi Sunak leaves Downing Street in London, Britain February 13, 2020. REUTERS/Toby Melville/File Photo - RC2KFF9BCSQN/File Photo

LONDON (Reuters) - Chancellor of the Exchequer Rishi Sunak said he would consider changing the fiscal framework used by the government, speaking in his first annual budget on Wednesday as he ramped up spending.

“It is important that we update our fiscal framework to remain at the leading edge of international best practice,” Sunak said.

“I will review the fiscal framework consulting widely with a range of experts and will report back in the autumn, if I conclude that any changes are necessary.”

Last year, Sunak’s predecessor as chancellor Sajid Javid announced a set of budget rules which said day-to-day, or current, spending had to be fully covered by tax revenue within three years and that public investment could rise to an average 3% of GDP.

Javid said those rules would be reviewed if debt interest costs exceeded 6% of tax revenue, triple their current level.

Sunak also said the current framework gave him some flexibility to react in coming years.

Reporting by David Milliken and William James, editing by Estelle Shirbon