Low and volatile gilt yields in the final quarter of fiscal 2005-6 have forced the government to announce new rules giving additional flexibility to the Debt Management Office in determining when it will issue debt.
Out of the 2006-7 tax year target of raising £63bn gross in new cash for the government, some £10bn is being withheld on the basis it may be issued on a supplementary basis from quarter to quarter through the year. “The remaining unallocated amount of £10.0 billion will be allocated on a quarterly basis throughout the year in a broadly even-flow manner (i.e. approximately £2.5 billion will be allocated each quarter),” the Treasury states in additional notes to today’s budget. “This is intended to increase the ability of the Government to respond to substantial changes in market conditio...
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