Chancellor John Healey is preparing to announce £20.4 billion in additional funding for Britain'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. This is pre-Budget reporting, not a confirmed measure, and the figures should be read as such until Healey speaks on 28 October.

Where the money would go

The National Wealth Fund would receive an additional £15.4 billion, allowing it to maintain its current lending rate until the 2030-31 financial year. That sum includes £2.0 billion for a renewables-focused Energy Wealth Fund. The British Business Bank would receive £5.0 billion, increasing its financial capacity to £30.6 billion from £25.6 billion. Together, the two institutions are the government's main vehicles for channelling public money into private investment, and the reported uplift would be one of the largest single expansions of their firepower.

How it would be paid for

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, because the financial assets created by the investments would offset the additional liabilities. A Treasury spokesperson said the additional capital would 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 amid pressure on public finances from higher borrowing costs linked to the Iran war.