News Release
Gilt-Edged Market: 1997-98 Financing Requirements and Auction Programme
02 July 1997
Following the Chancellor's Budget statement and the consequent changes to the CGBR forecast for 1997-98, details of the revised financing requirement for the remainder of 1997-98 (including the revised gilt sales requirement) are attached (Appendix 1).
In the light of the reduction in the gilt sales requirement, the auction calendar set out in the Remit of 12 March is amended as follows:
- the two dual auctions due to be held in the third and fourth quarters of the 1997-98 financial year are changed to single auctions; and
- the auctions due to be held in August 1997 and February 1998 are cancelled.
A revised auction calendar is attached (Appendix 2).
Note to Editors
The 1997-98 Remit to the Bank of England issued by H M Government on 12 March 1997 sets out the gilt issuance programme for the financial year 1997-98. The Remit stated that eleven auction sales were planned for 1997/98, comprising seven single stock auctions and four dual stock auctions. One dual stock auction was planned to be held in each quarter. The announcement made today reduces the number of planned auction sales in 1997/98 to nine and, in addition, two of the remaining three dual stock auctions will now be single stock auctions.
As indicated in Appendix 2, the stocks to be auctioned in the second quarter of the 1997-98 financial year will be announced at 3.30 pm on 11 July 1997 .
| Appendix 1 | |
| TABLE 1: Financing Requirement 1997/98: Progress to End-June | £ billion |
| CGBR Forecast | 12.4 |
| Assumed increase in net official reserves | - |
| Gilt Redemptions | 19.6 |
| Gilt sales residual from 1996-97 | -3.9 |
| Financing Requirement | 28.1 |
| Less: | |
| expected net inflow from National Savings | 3.0 |
| expected net sales of Certificate of Tax Deposits | 0.0 |
| Gilt sales required | 25.1 |
| Less: | |
| gilt sales already made (to end-May 1997) | 5.4 |
| tap/auction and other sales in June* | 3.2 |
| Further gilt sales required July 1997-March 1998 | 16.5 |
*As announced on Bank of England screen pages
Table 2: Distribution of Financing by Gilt Sales 1997/98
| Target set out in Remit | Sales to date | % sold to date (as a % of total sales to date) | ||
| Index linked | £5.0bn | 20.0% | £1.4bn | 16.3% |
| Conventionals shorts |
£7.0bn | 28% | £3.5bn | 40.7% |
| mediums | £6.0bn | 24% | £2.1bn | 24.4% |
| longs | £7.0bn | 28% | £1.6bn | 18.6% |
Note: individual numbers may not add to total due to rounding
Appendix 2
1997-98 Auction Dates
23 July 1997*
24 September 1997*
29 October 1997
26 November 1997
28 January 1998
25 March 1998**
* Whether the dual auction in Q3 1997 will be held in July or September will be decided following the meetings with GEMMs and end-investors on 3 July 1997 and announced on 11 July 1997. The dual auction will be held on the Tuesday and Thursday adjacent to the relevant date given above.
** This date is subject to change if it should coincide with the spring 1998 Budget.
