B.7 The DMO's consultation on the case for issuing gilts linked to the Consumer Prices Index (CPI) closed on 22 September 2011. Views were expressed both for and against CPI-linked gilt issuance. Many of the respondents highlighted some of the potential benefits of CPI-linked gilts but tempered this with uncertainty over the strength and sustainability of demand and/or an appraisal of key risks and other uncertainties. After careful consideration, the Government judges that issuance of CPI-linked gilts in the near-term would be unlikely to be cost-effective and would involve a number of risks, although it is possible that this could change over time. The Government therefore announces that it will not issue CPI-linked gilts in 2012-13 but will keep the case to issue CPI-linked gilts in the medium term under review. A formal response to the consultation has been published on the DMO's website alongside this document.
Table B1: Revised financing arithmetic for 2011-12
| 2011-12 | |
£ billion | April 20111 | Autumn Statement |
Central government net cash requirement | 120.4 | 135.0 |
Gilt redemptions | 49.0 | 49.0 |
Financing for the Official Reserves | 6.0 | 6.0 |
Buy-backs | 0.0 | 0.0 |
Planned short-term financing adjustment2 | -8.7 | -8.6 |
Gross financing requirement | 166.7 | 181.4 |
less: |
|
|
National Savings and Investments | 2.0 | 3.0 |
Net financing requirement | 164.7 | 178.5 |
Financed by: |
|
|
1. Debt issuance by the Debt Management Office (DMO) |
|
|
a) Treasury bills | -2.8 | -0.4 |
b) Gilts | 167.5 | 178.9 |
of which: |
|
|
short | 57.4 | 60.6 |
medium | 34.7 | 39.8 |
long | 37.4 | 39.5 |
Index-linked | 38.0 | 39.0 |
2. Other planned changes in net short-term debt3 |
|
|
Change in the Ways & Means Advance | 0.0 | 0.0 |
3. Changes in net short-term cash position4 | 0.0 | 0.0 |
Total financing | 164.7 | 178.5 |
Short-term debt levels at end of financial year |
|
|
Treasury bill stock5 | 60.8 | 63.2 |
Ways and Means Advance | 0.4 | 0.4 |
DMO net cash position | 0.5 | 0.5 |
Figures may not sum due to rounding. 1 Adjusted for restatement of the end 2010-11 Treasury bill stock (£63.6 billion not £64.1 billion). 2 To accommodate changes to the current year's financing requirement resulting from: (i) publication of the previous year's CGNCR outturn and subsequent revision from £139.6 billion to £139.7 billion; (ii) an increase in the DMO's cash position; and/or (iii) carry over of unanticipated changes to the cash position from the previous year. 3 Total planned changes to short-term debt are the sum of: (i) the planned short-term financing adjustment; (ii) net Treasury bill sales; and (iii) changes to the level of the Ways and Means Advance. 4 The DMO's net short-term cash position at the end of a financial year will also include any impact on financing arising from other activities carried out within government (e.g. issuance of tax instruments, transfers between central government and other sectors, and foreign exchange transactions). A negative (positive) number indicates an addition to (reduction in) the financing requirement for the following financial year. 5 The DMO has operational flexibility to vary the end-financial year stock subject to its operational requirements. | ||