Gilt auction failure.

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It seems King was right to warn of more borrowing to fund yet another fiscal stimulus, our first index linked gilt auction failure since 2002, and the first conventional gilt failure since 1995.

LONDON, March 25 (Reuters) - Britain suffered its first failed government bond auction since 2002 on Wednesday after it attracted just 1.627 billion pounds ($2.39 billion) in bids at a sale of 1.75 billion pounds of 2049 gilts.
Gilt prices tumbled after the auction result, with the June gilt future dropping as much as 1.9 points on the day and the 40-year gilt yield rising 8 basis points to 4.54 percent after being flat before the auction.
The UK Debt Management Office said its last failed auction in 2002 was for an index-linked gilt, and that Wednesday's failure was the first for a conventional gilt since 1995.

Just to edit. This now means IR rises or slashing public spending seem to be Brown's only hope now.

http://www.forexpros.com/news/forex-news/update-1-britain-suffers-first-failed-gilt-auction-since-2002-39133

purch

Would you lend the Government money for 40 years at 4.25 percent ? :eek:

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purch wrote: »

Would you lend the Government money for 40 years at 4.25 percent ? :eek:

mmmmm, let me think about that,........ NO.:D

Generali

purch wrote: »

Would you lend the Government money for 40 years at 4.25 percent ? :eek:

Only if I could be sure that Labour wouldn't get in again. That's the trouble, things look like they're ok-ish and then British people get all Socialist.

C'mon guys! Learn from history, please. Labour always ruin the economy. I mean every time they've been in Government they've had a go at destroying the economy.

Just Say No!

Wookster

Generali wrote: »

C'mon guys! Learn from history, please. Labour always ruin the economy. I mean every time they've been in Government they've had a go at destroying the economy.

Just Say No!

The problem is that the only thing the Tories have going for them is fiscal prudence. They aren't exactly a party inspiring hope, equal opportunity for all and support for those who desperately need it.

Edit: On the other hand though, Labour's slow but steady erosion of civil liberties probably puts them on par with the Tories for likeability though.

chucknorris

Wookster wrote: »

The problem is that the only thing the Tories have going for them is fiscal prudence. They aren't exactly a party inspiring hope, equal opportunity for all
and support for those who desperately need it.

Especially if you are a fox

Generali

Wookster wrote: »

The problem is that the only thing the Tories have going for them is fiscal prudence. They aren't exactly a party inspiring hope, equal opportunity for all
and support for those who desperately need it.

Fiscal prudence is a good start.

One of the things I like about Aus is the idea of 'A Fair Go'. I had to sign up for it when I migrated and if you listen to talk radio in the day then most days you'll hear it referred to.

The Tories under Thatcher I think came close to that ideal - work hard, keep your nose clean and in the end you'll have a nice lifestyle. You mightn't be rich but you'll have a nice house, bills paid and perhaps a hobby to enjoy. That's currently the Aussie ideal and I think that is fantastic.

purch

This auction has been on the calendar for months, long before anyone had learned to spell Qua..... Quen.... Quanatititi..... Q............ (bo**ocks :mad: ) ........errr Q.E. , let alone understood what it might mean.

These 40 year plus auctions are still a new concept, so in the current environment it was most likely to be the one to fall flat on it's face.

ruggedtoast

Holy crud.

http://www.guardian.co.uk/business/2009/mar/25/uk-economic-rescue-in-crisis

This is significant isnt it.

chucknorris

ruggedtoast wrote: »

Holy crud.

http://www.guardian.co.uk/business/2009/mar/25/uk-economic-rescue-in-crisis

This is significant isnt it.

Is it really that bad? I know it states they are usually over subscribed but they did sell over 92.5% of the gilts on offer

Mr_Mumble

purch wrote: »

Would you lend the Government money for 40 years at 4.25 percent ? :eek:

Anyone with an annuity is! The regulatory requirements on pensions oblige insurers to buy long-dated gilts. Its effectively a tax on pensions, even those with unsecured pensions have to buy at 75 (alternatively secured pensions are an option but that is a technicality given the punitive tax hit).

The failure of this auction could well see the budget address the issue by 'obliging' pension trustees, insurers and life assurance companies to hold a greater amount of 'safe' government debt.