UK gilt sale fails for first time since 1995
The Debt Management Office (DMO) which is in charge of managing UK government debt has today confirmed the failure of the sale of £1.75 billion worth of gilts set to mature in 2049. This is the first time that a sale of gilts has not been fully covered in the market with bids received for just £1.63 billion worth of stock on offer. This is a marked change from recent auctions which have on average been oversubscribed by 100%. What does this mean for the UK government?
The problem for the UK government is the fact that as national debt continues to rise this places more and more pressure upon the refinancing of debt due for payment over the next few years. Indeed many analysts predict that over £200 billion worth of government debt will need to be refinanced in the short to medium term to ensure orderly control of the U.K.'s finances. Analysts are growing more and more concerned about the debt situation in the UK which has reached epic proportions over the last few months.
As bond markets move against the UK government there is a serious risk of a debt crisis in the short to medium term and the potential to go cap in hand to associations such as the International Monetary Fund.
Share this..
Related stories
Council tax rise 'good news for government'
Britain's average council tax bill will increase by 4.2 per cent during 2007-8, the Chartered Institute of Public Finance and Accountancy (CIPFA) has said.Its forecast, based on a survey of almost two-thirds of English and Welsh local authorities' band D tax levels, is the second-lowest rise since 1994-5 but remains significantly above the government's preferred rate of inflation, currently at 2.7...
Read MoreMillions may be pushed into poverty by 2040
17/11/2014 Social policy charity the Joseph Rowntree foundation has released a report advising that the rising cost of private rents are on course to push thousands of people into poverty while adding billions of pounds onto the UK’s housing benefit bill. Using detailed historic data to examine the relationship between housing and poverty, the report has found that the private rents in En...
Read MoreFSA warns MPs about bank bonuses
The Financial Services Authority (FSA) has this evening warned MPs that they must not "pass the buck" with regards to the regulation of bank bonuses in the future. Despite the fact that the UK government was firmly behind an increase in regulatory powers, which would effectively allow the FSA to dictate how and when bonuses were agreed, the UK government seems to be taking a step back.
UK economic output declines further
The Office for National Statistics has yet again revised its figures regarding the performance of the UK economy over recent times. After initially reporting a 1.9% decline in the first quarter of 2009 and a 4.1% decline on an annual basis these figures have been revised to a 2.4% quarterly decline which equates to a 4.9% decline over the year. In simple terms, these are the worst figures ever for...
Read MoreWake up and smell the coffee
Coffee chain Coffee Republic has today been forced to call in joint receivers after a review of the business proved ultimately unsuccessful in finding a way out of the current financial situation. The company had been looking to renegotiate a number of rental arrangements with regards to a number of outlets but this appears to have fallen on deaf ears.
The company is simply a victim...