Wales should be given temporary borrowing powers by the UK Government if it is to recover from the coronavirus pandemic, a new report claims.

Researchers from Wales Fiscal Analysis says the current formula used by Westminster to allocate money to Wales does not take into account the country's older and sicker population compared to England.

Current restrictions stop the Welsh Government from borrowing money to cover day-to-day spending, including for its response to the Covid-19 outbreak, while the Barnett Formula mechanism which allocates funding for Wales is only based on the size of its population compared with England.

The research body's Guto Ifan, based at Cardiff University, said borrowing restrictions should be relaxed and suggested the UK Government introduce a temporary "needs-based" reform of the funding formula.

He also said a limit of £125 million Wales can draw from an account known as the Wales Reserve should be lifted, all of which would allow millions of pounds more to be spent on public services including the NHS.

The analysis comes a week after First Minister Mark Drakeford appealed to Westminster to increase the amount of money given to Wales to help it fight the outbreak, saying the funding should be based on its "older and sicker population".

Mr Ifan said: "Given the scale of the health and economic crisis resulting from the Covid-19 pandemic, urgent reforms are needed so Welsh Government can respond in a way that meets the needs of our citizens."

His report says the current funding formula was not a "fair reflection of the additional demands the crisis may place on Welsh public services".

A Welsh Government spokeswoman said: "We've announced more than £2 billion to tackle the coronavirus pandemic in Wales and continue to use all the tools available to us to boost our response.

"But we agree with the report's broad conclusions and have called on the UK Government for additional flexibility and need-based funding to respond to Covid-19, particularly given Wales' relatively older population."

An HM Treasury spokesman said: "So far the Welsh Government has received £1.6 billion of additional funding to help them respond to Covid-19, and we will continue to work closely with them to ensure they have the resources they need to support those affected by Covid-19.

"People in Wales will also benefit from unprecedented measures implemented by the UK Government which will provide support to people and businesses in all parts of the UK, such as the Job Retention Scheme, Self-Employment Income Support Scheme and Business Interruption Loan Scheme."