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UK launches massive bond sales to fund COVID-19 spending surge
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George Washington and Queen Elizabeth II are seen with printed medical masks on the one Dollar and Pound banknotes in this illustration taken, March 31, 2020. (REUTERS/Dado Ruvic/Illustration)
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ritain's government plans to sell more bonds over the next three months than it had previously planned for the entire financial year to fund a surge in public spending in the face of the coronavirus crisis.
The UK Debt Management Office said on Thursday it planned to issue 180 billion pounds ($222.43 billion) of government debt between May and July to finance the unprecedented measures announced last month to avert the collapse of Britain's economy.
Previously, the DMO had been planning to sell 156.1 billion pounds of bonds between April 2020 and March 2021.
"This higher volume of issuance is not expected to be required across the remainder of the financial year," Britain's finance ministry said.
British government bond yields rose slightly in early trade on Thursday.
A Reuters survey of 11 primary dealers had predicted the DMO would announce gilt issuance of around 300 billion pounds for the 2020/21 financial year as a whole.
So far, investors have shown little sign of balking at the jump in public borrowing although the Bank of England has agreed to expand the government's overdraft facility at the central bank, in case it struggles to raise cash in the debt market.
The finance ministry said a further update to the DMO's debt sales plan would be announced on June 29.
