UK allocates £20.4 billion to National Wealth Fund and British Business Bank
Key Facts
The UK plans to provide an additional £20.4 billion in capital to the National Wealth Fund and British Business Bank, according to a Financial Times report cited by Reuters, with the funding set to appear in the budget the week after the report was published on Oct. 23, 2026. The announcement makes capital directed to the two institutions one of the most prominent measures in the upcoming budget. A Treasury spokesperson said the funding would help more British businesses reach their potential. The programme also aims to direct investment to industries, infrastructure and regions that create good jobs and drive long-term growth. The budget is due to be presented on Oct. 28, while details of the measure had not been officially announced in the available sources.
According to the report, the National Wealth Fund will receive an additional £15.4 billion, while £5 billion will go to the British Business Bank. The two allocations will be spread over about half a decade, making the plan multi-year funding for the institutions. This allocation differs from injecting money into commercial banks: the recipients are a government investment fund and a bank focused on business financing. The Treasury said the aim is to help businesses and direct capital to productive economic activity. The move comes amid a stated drive to support sectors, industries, infrastructure and regions that contribute to job creation and growth.
The report said the funding would help support about 100,000 jobs by 2035 in sectors including artificial intelligence, defence and green energy. The target places jobs among the outcomes expected from the plan over several years, alongside directing investment to infrastructure and industries. The government had previously announced that the National Wealth Fund’s current capitalisation would be used to create and support an additional 130,000 jobs across the UK by 2030, in areas including artificial intelligence, technology, defence and clean energy. The two figures differ in their time horizons and wording: the first concerns jobs the new funding is expected to support, according to the report, while the second is a previous government target for the fund. Treasury data show that the fund had completed deals worth £5.8 billion by March 2026, mobilised more than £6.6 billion in private capital and directly supported more than 19,200 jobs.
The plan enters the budget debate amid pressure on public finances. Public sector net borrowing reached £24.5 billion in September 2026, up £1.8 billion from the same month a year earlier and £1.9 billion above the Office for Budget Responsibility’s forecast. From April to September, borrowing reached £97.8 billion, £4.4 billion below the corresponding period but £6 billion above official forecasts. Central government debt interest was £10.9 billion in September, up 16.6% year on year and £2 billion above the office’s forecast. The figures show that cumulative borrowing improved from a year earlier but remained above the Office for Budget Responsibility’s estimate.
At the end of September, UK public sector net debt was provisionally estimated at £3,005 billion, equivalent to 94% of gross domestic product. The debt-to-GDP ratio was 0.7 percentage points below its level a year earlier, despite an increase in the nominal value of debt. The Oct. 28 budget is due to be accompanied by an updated set of fiscal forecasts from the Office for Budget Responsibility. The forecasts will be published as the government presents its fiscal plan, while businesses approach the budget having delayed some spending amid uncertainty over domestic economic policy. S&P Global said the direction of policy in the budget would affect businesses’ appetite to invest and hire.
The budget also follows an increase in annual inflation: the consumer price index rose 3.5% in the 12 months to September 2026, compared with 3.1% in August. Transport, particularly motor fuels, made the largest upward contribution to the monthly change in the annual rates of the consumer price indices, while restaurants and hotels made the largest offsetting downward contribution. Businesses surveyed said they had delayed spending because of uncertainty over domestic policy ahead of the budget, putting investment and hiring decisions among the areas that will be affected by the direction of fiscal policy announced on Oct. 28.