UK Sovereign

The UK will make its green bond debut in the summer before following up with a second deal later in the year, the country's Debt Management Office said on Wednesday as it announced its borrowing remit for its 2021/2022 fiscal year.

The UK’s Budget on Wednesday is likely to go down as the greenest ever, but it still left sustainable finance advocates disappointed, as Rishi Sunak, the chancellor of the exchequer, failed to give clarity on vital programmes and spending, at the beginning of a decade in which the country will have to make vital investments towards achieving its ambition of net zero greenhouse gas emissions by 2050.

The UK Debt Management Office announced its borrowing remit for its 2021/2022 fiscal year on Wednesday, following the chancellor of the exchequer Rishi Sunak's budget speech, which includes plans to sell a debut green Gilt in the summer with another later in the year. A new UK infrastructure bank, which will use debt and equity capital was also made official in the budget.

UK chancellor of the exchequer Rishi Sunak is preparing to unveil his latest budget on Wednesday. Leaks point to a package of tax hikes and spending cuts. But a repeat of the discredited model that the Conservative Party, of which he is a member, embraced to tackle the 2008-2009 financial crisis would miss a huge opportunity to finance growth just when borrowing costs are as low as they will ever be. Austerity will prove a false economy that drives investment elsewhere.

The UK is set to announce the world’s first sovereign green bonds for retail investors. The proceeds will help to finance projects aimed at achieving the country’s target of reducing greenhouse gas emissions to net zero by 2050.

UK Labour Party leader Keir Starmer has proposed a “British Recovery Bond” — a retail government issue that would be used to finance SME lending to help kick-start the economic recovery from the coronavirus pandemic. It can be tempting to dismiss such measures as political posturing, but there are some genuine advantages to the proposal, and it deserves its day.

Two factors bear outsized influence on capital markets — Covid-19 and central bank stimulus. But the temptation to see these powerful forces culminating in one of two extreme outcomes — another crash as a feeble economy flounders, or a boom like the 1920s US — must be resisted.

The UK sold its last syndication of the financial year on Tuesday, selling a £2.25bn 2051 index linked bond — its first syndication in the format since November 2019.

The International Development Agency sold a sterling benchmark on Wednesday, raising £1bn with its second benchmark in the currency.

The UK Debt Management Office has picked the banks to lead the launch of a new long-dated index-linked Gilt, which will be the final syndicated transaction of its 2020/21 financial year.

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The UK Debt Management Office has appointed two banks as structuring advisers for the sale of its inaugural green Gilt, due to be issued this year.