Gilts' false hopes for the Budget

Article Abstract:

The United Kingdom Mar 1999 Budget is likely to lead to a reduction in planned issues of government securities (gilts). The government could sell more gilts than it purchases in 2000, and demand for gilts is high from pension funds and life assurance companies. This does not mean the price of gilts will rise, since low issuance often occurs in boom years when gilts tend not to perform well. Issuance levels may change over the long term. Short term reductions in gilt issuance do not always lead to a significant drop in yields.

Government Bonds, Budget, Budgeting, Budgets, Government securities

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Keeping its powder dry

Article Abstract:

United Kingdom interest rates are not likely to be raised in early Jun 1998, though the Bank of England has set out reasons for such a rise in its Inflation Report of May 1998. Wage inflation is causing most concern. Pound sterling has also dropped in value, while the growth of the money supply has accelerated. Monetary policy appears to be too loose, but the economy is slowing, and an increase in interest rates could lead to uncertainty over where interest rates are heading.

Interest Rates

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