Friday, 1 May 2009

Watch that debt grow at the DMO

Over at the UK Debt Management Office website you can see a calendar of gilt auctions and the amounts raised. Link: here.

Today is the 1st of May, so a good time to check on how our debt grew in April - the first month of the government's financial year. A quick totting up shows they sold £18,637,000,0000 worth of gilts in April.

Multiply that by 12 and you're up to £223bn which is well on track to raise the £220bn they will be needing this year; that's £175bn to cover government over-spend plus £45bn to replace gilt bonds reaching their maturity, ie debt roll-over.

In the auction results you can see how much was actually paid for the bonds; usually slightly more than their nominal value. It's when buyers offer less than the face value, or just don't bid at all, that things get interesting.

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