While Chancellor Reeves promises an infrastructure renaissance, this fiscal revolution might be more about creative accounting than genuine economic transformation. At the heart of Reeves' plan is a redefinition of how debt is measured. By transitioning to the broader PSNFL metric, the government can offset liabilities with assets, increasing fiscal headroom. This will enable greater borrowing, aiming to unlock up to £50 billion for investment. However, despite this grand vision for greater domestic investment, there is a real risk that the plan could unravel if borrowing costs spiral out of control, leaving taxpayers to foot the bill.

Following the announcement, gilt yields rose, reflecting market apprehension about elevated debt levels at a time when borrowing costs are falling in other major economies. The success of this initiative will depend on the government's ability to fund projects that enhance the UK's productive capacity rather than just changing numbers on a balance sheet.