The government has delivered an unprecedented package
of measures to provide the critical support needed by individuals,
families and businesses, through the economic disruption caused by
COVID-19, and set out a plan to support jobs as the economy
reopens.
This has necessarily increased the government’s financing
requirement compared to that set out at Budget 2020. The
Chancellor has already outlined that this will be fully funded
through the government’s normal debt management operations.
HM Treasury (HMT) is today announcing a further revision to the
UK Debt Management Office’s (DMO’s) financing remit for 2020-21,
covering the September to November 2020 period. This follows the
previous revision to the DMO’s financing remit for 2020-21,
published on 29 June 2020.
Planned gilt sales from April to November 2020 inclusive will
total a minimum of 385 billion, based on the government’s latest
assessment of its financing requirement. The DMO is today
publishing details of the provisional gilt issuance schedule for
September to November 2020 on its website.
The higher volume of issuance seen so far this year due to
COVID-19 is not expected to persist over the final four months of
the year.
A further update to the DMO’s financing remit and planned
issuance schedule for 2020-21 will be announced at the Autumn
Budget.
At Budget 2020, NS&I was set a net financing target of 6
billion for 2020-21, within a range of 3 billion to 9 billion.
The target is being increased by 29 billion to 35 billion, within
a range of 30 billion to 40 billion.
Notes
-
The Office for Budget Responsibility’s (OBR) Fiscal
sustainability report, published on 14 July 2020, suggested
that the gross financing requirement (GFR) for the full
financial year could be in the range of 393 billion to 521
billion based on the OBR’s three new medium-term scenarios
for the economy and public finances. These are however
illustrative scenarios, rather than a central forecast.
-
The net financing requirement (NFR) for the DMO comprises:
the central government’s cash need, plus any financing for
gilt redemptions and other adjustments (such as adjustments
for unintended under or over financing from the previous
year), less the net contribution to financing from NS&I.
-
Additional details of the revised gilt issuance schedule,
including the DMO’s provisional operational calendar for
September to November 2020, are set out in the DMO’s
financing remit announcement, as published on its website
today.
-
The DMO has raised 217.1 billion via gilt sales in 2020-21 to
date.
-
Further information can be found at:
