The government will transformation its self-imposed obligation rules in order to free up billions for infrastructure spending, the chancellor has told the BBC.

Rachel Reeves said that she would make a technical transformation to the way obligation is measured which will allow it to pool extra resource.

She said this was being done “so that we can develop our economy and bring jobs and growth to Britain”.

However, Reeves’ first budgetary schedule next week is still expected to cruel some cuts to community services and levy rises.

The government has committed to get obligation falling as distribute of the economy during the course of this Parliament, rather than over a rolling five-year period.

But the wider obligation assess is expected to allow for up to £50bn more borrowing to invest in large building projects such as roads, railways or hospitals, although not all of this is expected to be allocated at the budgetary schedule.

“We will be changing the assess of obligation,” Reeves told the BBC, adding that she will set out the details of that on 30 October.

She said the Treasury would “be putting in guard rails” on resource spending by having the National Audit Office and the Office for budgetary schedule Responsibility, the government’s budgetary watchdog, “validating the investments we’re making to ensure we deliver that worth-for-money”.

Reeves added having such oversight would also “provide markets confidence that there are rules around the investments we can make as a country”.

Shadow chancellor Jeremy Hunt said the “consistent advice I received from Treasury officials was always that increasing borrowing meant gain rates would be higher for longer – and punish families with mortgages”.

“The markets are watching,” he added.

It is understood the extra room for manoeuvre for spending on resource projects will not be able to be used for extra day-to-day spending or to reduce planned budgetary schedule levy rises.

The chancellor also said she will confirm a tighter rule on spending on welfare, in government departments, and on obligation gain.

That rule “is the one that really binds, and it’s challenging to meet, and that will require challenging decisions on spending, welfare and taxation,” she said.

The chancellor said she intended to reverse what she called “the path of decline” that she says she has inherited from the previous Conservative administration.

She suggested this would have seen a fall in government resource from 2.6% of the distribute of the economy last year to 1.7% by 2028-29, or £20bn a year in funds terms.

“If we continued on that path, we’d miss out on other opportunities, and other countries would seize them,” she said.

“We require to invest more to develop our economy and seize the huge opportunities there are in digital, in tech, in life sciences, in tidy vigor, but we’ll only be able to do that if we transformation the way that we we assess obligation,” she said at a conference at the International Monetary pool (IMF) in Washington DC.

The Treasury had already signalled that a rule transformation was likely ahead of the budgetary schedule.

The chancellor cited top economists as backing the shift, including both the former governor and chief economist of the lender of England, Mark Carney and Andrew Haldane, as well as former Conservative Treasury minister Jim O’Neill.

She also referred to the words of a top IMF official overnight.

The organisation’s first deputy managing director Gita Gopinath backed greater resource, speaking to the BBC: “I just desire to highlight again, that community resource is needed in the UK.

“If you contrast the UK to G7 countries, resource has fallen short, and so that spending will have to receive place alongside having the benevolent of rules that stabilizes obligation over the next five years.”

But writing in The Times newspaper last week, Paul Johnson, director of the Institute for budgetary Studies ponder tank, said that using a broader obligation assess called community sector net budgetary liabilities could have downsides, including potentially spooking budgetary markets, which pool the government’s borrowing.