News Release
Gilt-Edged Market: 1997-98 Financing Requirement
25 November 1997
Following the Chancellor's Pre 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 at Appendix 1. There are no changes to the gilt auction schedule announced following the Budget in July.
Conversion offers
The 1997-98 Debt Management Report (published in March 1997) made clear that the authorities would seek opportunities to make conversion offers in the current financial year, building on the two offers made in the previous year. However, system changes associated with the introduction of the upgraded CGO service have prevented further conversion offers so far in 1997-98 and, with the CGO upgrade having been inaugurated on 10 November, it will not be possible to complete the system changes in time to permit conversion offers to be resumed ahead of March 1998. The authorities have therefore decided that no conversion offers will take place in the remainder of the 1997-98 financial year.
The authorities remain committed to conversion offers in order to build up the stock of strippable gilts. They intend to make further offers in the 1998-99 financial year.
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 was revised following the Budget in July which reduced the gilt sales requirement from £36.5 billion to £25.1 billion. The gilt auction schedule for the rest of the financial year was changed as a result, with the number of planned auction sales in 1997-98 reduced from eleven to nine and, in addition, two of the remaining three dual stock auctions were changed to single stock auctions.
| Appendix 1 | |
| Financing Requirement 1997/98: Progress to End-October | £ billion |
| CGBR Forecast | 11.7 |
| Assumed increase in net official reserves | 0.0 |
| Gilt Redemptions | 19.6 |
| Gilt sales residual from 1996-97 | -3.9 |
| Financing Requirement | 27.4 |
| Less: | |
| expected net inflow from National Savings | 2.0 |
| expected net sales of Certificate of Tax Deposits | 0.0 |
| Gilt sales required | 25.4 |
| Less: | |
| gilt sales already made (to end-October 1997)* | 18.4 |
| Further gilt sales required November 1997-March 1998 | 7.0 |
*As announced on Bank of England screen pages
Table 2: Distribution of Financing by Gilts Sales 1997/98
| Target in Remit | Sales to date | % sold to date (as a % of total sales to date) | ||
| Index linked | £5.1bn | 20.0% | £3.5bn | 19.0% |
| Conventionals shorts |
£7.1bn | 28% | £5.1bn | 27.7% |
| mediums | £6.1bn | 24% | £4.2bn | 22.8% |
| longs | £7.1bn | 28% | £5.6bn | 30.4% |
Note: individual numbers may not add to total due to rounding
