UK to inject £20.4 billion into state-backed lenders in budget, FT reports

Investing.com -- British Chancellor John Healey is expected to announce £20.4 billion ($27.3 billion) in additional funding for two state-backed financial institutions in Wednesday’s budget, the Financial Times reported, citing confirmation from the UK Treasury.

The funding will strengthen the National Wealth Fund and British Business Bank, supporting investment in strategic industries and infrastructure projects across the country.

According to the Treasury, the National Wealth Fund will receive an additional £15.4 billion ($20.6 billion), while the British Business Bank will receive a further £5 billion ($7 billion).

The capital injections will be distributed over approximately five years, providing additional financial resources to support businesses and investment projects.

The Treasury estimates the funding could help support around 100,000 jobs by 2035, particularly in artificial intelligence, defence and green energy.

A Treasury spokesperson said the additional capital would help British businesses expand while directing investment towards industries, infrastructure and regions capable of generating employment and long-term economic growth.

The Financial Times first reported the planned funding increase, which the Treasury subsequently confirmed.

The announcement comes as Healey prepares his first budget under Prime Minister Andy Burnham’s government, with investors closely monitoring the administration’s approach to public borrowing and economic growth.

The planned capital boost highlights the government’s intention to support private-sector investment through existing state-backed financial institutions.

The National Wealth Fund focuses on financing projects that support Britain’s infrastructure and strategic economic priorities, while the British Business Bank helps improve access to finance for businesses.

The additional resources could expand both institutions’ capacity to support investment without relying exclusively on direct government spending programmes.

Wednesday’s budget will provide further details on how the funding fits into the government’s broader fiscal plans, including its approach to borrowing, taxation and economic development.