Bond experts cautious on UK's short-dated debt plans

Analysts have raised concerns about the government's debt plans for 2013-14 after the Budget revealed a sharp rise in the amount of short-dated debt due to be issued.

Although overall issuance is set to dip next year, the level of ultra-short dated Treasury bill stock is to rise by 12% from £56bn to £68bn, raising eyebrows in some quarters. Marc Ostwald, a strategist at Monument Securities, said the increased bill issuance makes sense in terms of demand but is still a “very defensive” move. “[The change is] implicitly showing concern about a rise in long-term debt servicing costs, above all inflation-linked,” he said. Ostwald added the issuance could also be seen as signalling increased uncertainty about foreign demand, particularly in light of ...