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Home > Statistics > Explanatory Notes - Transactions in marketable government debt (discontinued)
 

Explanatory Notes - Transactions in marketable government debt (discontinued)

Overview


British government stocks - analysis of net official sales’ comprises sterling denominated British government stocks and government-guaranteed marketable securities of nationalised industries.

Availability

These data were discontinued in March 1998/99. Data up to March 1999 are available in Table 16.1 to 16.3 of the Statistical abstract.

Sources


Data are collected from the Debt Management Office, the Bank’s Banking & Market Services Department and banking returns. Data of varying completeness are available about transactions by local government, public corporations, banks, building societies, private non-financial corporations and non-residents. Holdings by the household sector are believed to be relatively small.

Data on British government stocks for the private sector are taken from ONS survey data, and are therefore subject to coverage, sampling and reporting errors, and should be viewed with appropriate caution.

Definitions

These data include a maturity analysis of official transactions (i.e. transactions by the National Loans Fund and the ‘official holders’ of stock noted above) in conventional stocks. Figures for total ‘official purchases’ and ‘gross official sales’ (see below for the definition of these terms) of index-linked stocks are also shown. In this analysis, stocks with optional redemption dates are classified according to the final date.
 
The figures for net official sales comprise total cash issues less redemptions (including purchases by government sinking funds), and less net purchases by the Debt Commissioners, the Debt Management Office and the Northern Ireland central government. Separate figures are given for net official sales of ‘conventional’ (i.e. non-index-linked) stocks and, from their introduction in 1981, index-linked stocks. Following the transfer of responsibility for gilt issuance from the Bank to the Debt Management Office in April 1998, these data are now published by the Office for National Statistics.
 
‘Official purchases’ are defined as redemptions, purchases of stock up to one year to redemption are defined as ‘next maturities’ and, until 1995 Q4, net transactions under sale and repurchase arrangements (‘repos’).
 
‘Gross official sales’ are defined as sales of stocks over one year to maturity net of any buying-in of stocks with more than one year to redemption other than repos; they are then divided into three maturity bands. Gross official sales less official purchases equal net official sales.
 
A lengthening of maturity occurs when market holders exercise conversion rights that are attached to certain stocks. The figures are the market values of the newly acquired stock on the date of the conversion. These non-cash transactions net out to zero.
 

British government stocks - analysis by sector

These data give a further analysis by type of holder of the series for net official sales (of both index-linked and ‘conventional’ stocks). The changes in holdings approximate as closely as possible to cash values but in some cases (e.g. for banks) the figures represent changes in book value. The residual difference between government net sales and identified transactions of other sectors is attributed to the personal sector, included here within ‘Private sector - Other’.

 
Non-residents’ figures are based on balance of payments statistics partly derived from statistics on UK external liabilities in sterling; and partly derived from the registers of government stocks.
 
CMIs (central monetary institutions) cover central banks, most currency boards, the Crown Agents when acting as agents of CMIs, the Bank for International Settlements and a few other accounts known to be used for central banking purposes.
 
The banks’ category includes banks in the United Kingdom, discount houses (to Q4 1996) and transactions by the central bank sector. Girobank plc, formerly National Girobank, is included throughout.
 
Private sector – Other figures should represent the remaining private sector holdings. It is calculated as the residual when all the known holdings of British government stock are taken away from the total stock in issue.
 
Other public sector figures comprise identified transactions by public corporations and local government.
 

Sterling Treasury bills - analysis by sector

These data analyse (by type of holder) the change in market holdings of sterling Treasury bills at nominal values. Responsibility for Treasury bill issuance was transferred from the Bank to the Debt Management Office on 3 April 2000.

Market holdings comprise all bills outstanding other than those held by the National Debt Commissioners, the Exchange Equalisation Account, and central government departments.

These are bills issued at the weekly tenders, including any bills originally issued outside the tender (tap bills), sold to the market by government departments, less any bills purchased from the market by such entities.

Consequently, changes in market holdings reflect, until 1995 Q4, sales of bills from the market to the authorities under sale and repurchase agreements (‘repos’) and the subsequent unwinding of such arrangements upon maturity.

The non-resident sector excludes the sterling counterpart of inter-central bank swap transactions. Also, the non-resident and banking sectors show changes in book value. Any difference between nominal and book values is offset in the residual figures for unidentified holdings, allocated between non-resident (to allow for direct, rather than identified custodial, holdings) and other financial institutions (for non-reporting institutions).

Valuation and Breaks

From 1996 Q1 the statistical treatment of repos changed; Bank of England Issue Department repos were than classified as a claim on the counterparty.
 
This analysis of net official sales reflects the positions at the time the transactions were undertaken. Only from 1998 Q2 are the total net official sales congruent with the total shown in the analysis by sector. The latter is on a European System of Accounts 1995 (ESA 95) basis, under which transactions by the central bank form part of the market, rather than official transactions. These changes are with effect from financial year 1990/91.
 
The National Savings Bank Investment Account is included in the non-bank private sector until December 1980; thereafter it is included within ‘official holders’. The Trustee Savings Banks were transferred from the non-bank private sector to the monetary sector (as then defined) at end-December 1981.
 
Private sector figures are taken from ONS survey data, are therefore subject to coverage, sampling and reporting errors, and should be viewed with appropriate caution.

Key Resources

Public Sector Net Debt data continue to be published by the Office for National Statistics, in Table 1.1D of Financial Statistics.

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