UK gold bond issue expected in 2023

11/16/2022

2 minutes read

2022.11.16 03:53

UK bond dealers see jump in gilt issuance for 2023/24 - Reuters poll

UK gold bond issue expected in 2023

Budrigannews.com – Wednesday showed that compared with the plan soon after the release of the “mini-budget” on May 9, the UK is expected to reduce its debt issuance plan for this fiscal year, but its issuance will increase significantly next year.

Finance Minister Jeremy Hunt will formulate a new borrowing plan on Thursday to increase confidence in the UK’s finances after the failure of his predecessor Kwasi Kwarteng. 23 Statement led to the resignation of Prime Minister Liz Truss and forced the Bank of England (BoE) to intervene in the bond market.

Banks that can directly bid for British government bonds, known as gold-plated market makers (Gemms), are expected to issue an average of 185/221 billion pounds (-2022/23 billion) of bonds in the UK. 23.

However, in the 2023/24 financial year, gold issuance is expected to increase to 23.8 billion pounds. According to the survey’s median forecast, 486% of the funds will be used to fund COVID-2020/21 support measures within 19 years.

Theo Chapsalis, head of UK interest rate strategy at Morgan Stanley (Nyse:), said: “This will have a lasting impact on the market.

He added: “We usually think that slower growth is good for gold, but the combination of continued high supply and long-term high inflation will still make gold an unattractive asset in the bond world.”

Compared with the intense issuance period before the Bank of England’s quantitative easing policy was fully launched, contrary to the fact that the Bank of England is currently selling its gold holdings of more than 800 billion pounds, the scale of British government bond issuance has become more difficult.

Rbc estimates that the net issuance of 22.8 billion pounds in the next year after the global financial crisis will be nearly 130 billion pounds higher than the record of 11 billion pounds in 2010/10.

The downward revision of the gold-plated gold bank this fiscal year reflects multiple reversals of Kwarteng’s tax cuts and price declines, which have reduced the short-term cost of temporary energy subsidies.

Jamie, an interest rate strategist at Citi, said:Jamie Searle said that the market will focus on the issuance plan for the next fiscal year, not beyond.

He said: “It doesn’t seem that there should be too many surprises, but the gilt market is still fanatical, and even small news can lead to big reactions.”

He added that BMD is more likely to reduce gilts issuance in the short and medium term, because most of the gains this month have been concentrated.

According to the median forecast of the survey, the net issuance of U.S. Treasury bills remained unchanged at 40 billion pounds per month.

The yield on the British 10-year gold leaf was trading at around 3.38% on Tuesday. It is well below the 23- and 14-year high of 4.632%. 12.

Gilt issuance is different from public sector net borrowing (PSNB), which is the main borrowing measure predicted by the UK Office for Budget Responsibility.

Here, GEMMs expects PSNB (excluding public sector banks) to rise to a median of £18.7 billion, almost twice the £9.9 billion predicted by the OBR in March. It is expected to fall to 14.2 billion pounds next year, and the OBR predicts 50.2 billion pounds.

GEMM PSNBx Gold Total PSNBx Gold Total

2022/23 published 2023/24

2022/23 2023/24

Bank of America (New York Stock Exchange:) 190168150200

Credit card (179)

BNP Paribas (display:) 110

City 187185145246

Deutsche Bank (ETR:) 180182126217

197 194 140 238

JP Morgan Chase 192

Morgan Stanley 174186129233

192 185 210 284