THE UK will have to up its borrowing targets this year on reduced forecasts, Treasury figures out yesterday revealed.
Gilt issuance will now hit £178.9bn for 2011/12, up £11.4bn on April’s estimates.
More shorter-dated Treasury bills will also be issued, with an extra £2.4bn taking the total to £63.2bn.
The proportion issued at each maturity is set at the start of the financial year.
In line with these pre-set levels, an extra £3.2bn will be short-term gilts (with maturities of up to seven years); £5.1bn of the additional issuance will be medium-term bonds (seven to 15 years); and £2.1bn will have longer maturities.
The final £1bn will be index-linked gilts – a class which is being phased out for next year on the basis that “issuance in the near term is unlikely to be cost-effective and would involve a number of risks.”
Nonetheless, the government does have a large amount of debt issuance coming up in the next few years, and “will keep the case to issue CPI-linked gilts under review”.