Auctions planned for index-linked gilts
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Your support makes all the difference.In the next step in its programme to reform the gilts market, the Government announced yesterday that it will move to a programme of auctions for index- linked gilts as soon as feasible. It will also aim to increase the share of index-linked gilts in the total issued to a fifth, up from 15 per cent. Angela Knight, Economic Secretary to the Treasury, said the move represented a "further improvement in the transparency of the borrowing programme", following on the development of the gilt repo market and the gilt strips market due to start in the autumn.
The Bank of England will start consultations on the index-linked gilt auction programme later this year, when there will be evidence from the US experiment in issuing index-linked Treasury bonds as to how it might work. The Government's financing requirement - redemptions plus the expected public sector borrowing requirement - will be just under pounds 40bn in 1997/98, of which National Savings will contribute around pounds 3bn and gilt sales the rest.
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