Treasury courts new sources of demand as it faces record bond issuance needs
The UK has opened up access for retail investors to buy newly issued gilts, as the government seeks to tap fresh sources of demand in a record year for bond sales. Winterflood Securities, a government-appointed dealer for UK debt, is allowing individual investors for the first time to buy government bonds in the primary market through major retail investment platforms...
The unlocking of retail access to gilt sales comes as the UK faces daunting borrowing needs, with the government’s gross financing requirement estimated at about £277bn for the 2024-25, 16 per cent higher than the current year. The government has been exploring the “potential for retail investors to contribute more significantly to meeting the overall financing requirement”, according to the minutes of an annual meeting between the UK’s Debt Management Office, bond dealers and investors published last month.
The move brings the UK closer in line with other major bond markets, which already sell bonds directly to the public, such as the US Treasury, which sold $580bn in bills and $20bn in bonds and Treasury inflation-protected securities last year. Countries in the eurozone have also increasingly turned directly to their own citizens to fund borrowing, with Italy, Belgium and Portugal issuing about €77bn worth of bonds directly to households last year, up from €26bn the previous year...
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