U.K. Gilts Slump After First ”˜Failed’ Bond Auction Since 1995

U.K. gilts slumped after demand at an auction of bonds fell short of the amount offered, the first time the Treasury failed to attract enough bids at a sale of nominal debt in 14 years.

Investors bid for 1.63 billion pounds ($2.4 billion) of the 40-year securities, less than the 1.75 billion pounds of 4.25 percent notes slated for sale, the U.K. Debt Management Office said today in a statement from London.

“Basically it’s the first failed auction,” said John Wraith, head of sterling interest-rate strategy at RBC Capital Markets in London. “They didn’t receive enough to cover it all so the market has obviously sold off extremely heavily.”

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Posted in * Economics, Politics, * International News & Commentary, Credit Markets, Economy, England / UK, The Credit Freeze Crisis of Fall 2008/The Recession of 2007--

2 comments on “U.K. Gilts Slump After First ”˜Failed’ Bond Auction Since 1995

  1. C. Wingate says:

    Note that Bloomberg has revised this story, noting that the last failure was only seven years ago, and that there was another failure in 1999. I’m sure this is not pleasant to the Labour government, but it doesn’t appear to be something earth-shaking.

  2. Pageantmaster Ù† says:

    Actually Bank of England Governor Mervyn King has done more than tell lawmakers in Parliament in London the government should be “cautious” about spending and deficits.

    According to the Times:
    [blockquote]He raising strong doubts over any prospect of another round of “significant fiscal expansion” next month…..
    “It would be sensible to be cautious about going further in using discretionary measures to expand the size of those deficits.[/blockquote]
    Further and very unusually he met the Queen yesterday for a first audience for him as Governor of the Bank of England.

    Meanwhile Mr Brown has been blaming bankers for the problems and this is yielding results. One, Sir Fred Goodwin was attacked in his home yesterday:

    So Mr Brown plows on with his plans for bankrupting us with even more borrowing, blaming it all on the bankers, in fact blaming everybody but the government and himself…..