Gilt issuance needs to rise to meet govt commitments

UK Treasury's poor track record in predicting its future borrowing requirements is putting pres...

UK Treasury's poor track record in predicting its future borrowing requirements is putting pressure on gilt prices. The Treasury has put its 2003/2004 gilt funding requirement at £40bn, up from an estimated £26bn in 2002/03. However market watchers expect even this expansion in public sector borrowing will not be enough to cover government spending commitments, particularly if tax receipts suffer because of weak economic growth. Aberdeen senior global fixed income fund manager Derek Fulton says the gilt market was one of the worst performing government bond markets during March, p...