British government considering 100-year bonds

14 March 2012

The UK government is considering the possibility of selling 100-year and perpetual bonds in order to protect the country's long-term financial future.

According to a source within the Treasury, widely reported in today's UK newspapers, ministers are eager to make sure the current low market interest rates are locked in for the coming years, as this will help cut the costs of the administration's debt burden.

Consequently, it has been decided that the Debt Management Office will produce a consultation to go alongside chancellor George Osborne's latest budget speech next week.

This is intended to determine the overall attitude in the markets towards 100-year bonds, but initial talks with investors are said to have been positive.

The Treasury official observed this initiative is aimed at ensuring the "tangible benefits of the government's credibility and the safe-haven status we have today" are maintained in the long term.

"The prize is lower debt interest repayments for taxpayers for decades to come," the insider added.

By Asim Shah

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