Pensions savings shortfalls and regulations forcing closer matching of assets and liabilities are just two reasons gilt specialists expect tomorrow's auction of some £2.5bn worth of 50-year gilts to be a storming success.
However, there may be other reasons the government is so keen to offer the long-dated paper, according to some comment from the industry. Jonathan Cloke, associate director fixed interest at L&G Asset Management, says he believes the Debt Management Office will look to issue £10bn worth of 50-year paper this fiscal year. While the general demand reasons, such as the need for pension funds to better match assets and liabilities, hold true, there remains an ever-so-slight whiff of politics in the background. This new debt could provide cheaper funding on behalf of taxpayers, but it c...
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