BUDGET '09: Yields soar on shock £220bn gilt issue

The UK Government has announced plans to issue more than £220bn worth of government bonds this finan...

The UK Government has announced plans to issue more than £220bn worth of government bonds this financial year, well above the expected level. With public borrowing expected to soar above £170bn over the next year, Chancellor Alistair Darling has announced the Government will be forced to issue £70bn of more gilts than the Debt Management Office estimated last month. The news sent the benchmark 10-year gilt yield up to about 3.45%, but it has since stabilised somewhat to 3.41%. At its March meeting, the MPC decided to initiate the purchase of £75bn of assets using central bank reserves...