Published by Global Banking and Finance Review
Posted on March 26, 2025
By David Milliken
LONDON (Reuters) - Britain's Debt Management Office said it plans to issue 299.2 billion pounds ($386 billion) of government bonds in the 2025/26 financial year, slightly less than markets expected, after finance minister Rachel Reeves gave a budget update on Wednesday.
The planned gilt issuance is below the average 304 billion pounds which primary dealers had expected in a Reuters poll but up slightly from the 296.9 billion pounds of issuance in the 2024/25 financial year.
The Debt Management Office (DMO) also said it would increase the net stock of Treasury bills by 5 billion pounds, in line with the median expectation in the Reuters poll.
Gilt futures rose sharply after the DMO announcement, reversing losses made during Reeves' speech.
Long-dated gilt issuance looks on track to be markedly lower than in 2024/25.
The 2025/26 gilt issuance will be made up of at least 37% short-dated conventional gilts, 30% mediums, 13% longs and 10% index-linked gilts, while 9% of the issuance will not have a maturity set until later in the year.
In the 2024/25 financial year, issuance was split to roughly 35% short-dated gilts, 31% mediums, 20% longs and 11% index-linked.
Several dealers polled by Reuters had expected the share of long-dated gilt issuance to be cut to around 16% in 2025/26, due to its relatively high cost and a long-term decline in demand for this debt from domestic pension funds and life insurers.
The DMO defines short-dated gilts as those with a maturity of up to seven years, mediums as those with a maturity of seven to 15 years and longs as over 15 years.
($1 = 0.7749 pounds)
(Reporting by David Milliken; Editing by Hugh Lawson and Conor Humphries)
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