According to a survey from Reuters, Britain will decrease the number of government bonds sold in the coming financial year, as stronger economic growth and public finances reduce borrowing needs.
Britain experienced faster than predicted economic growth through 2013, with experts believing that the Office for Budget Responsibility (OBR) will revise its forecast for 2014, which is currently one percentage point below the Bank of England’s forecast at 2.4 percent. The survey also revealed any changes to the proportion of gilts issued across different sectors will only be gradual. The UK government’s 2013 autumn statement showed that primary dealers expect long-dated and index-linked bonds to make up 22 and 25 percent of total gilt issuance respectively in 2014-2015, compared to the 22.3 and 24.4 percent planned for 2013-2014.
Deficit reduction has been Finance Minister George Osborne's key policy since the coalition came to power in May 2010, when the budget deficit for the UK was one of the world’s highest at 11 percent of economic output. Patrick Phelan, Managing Director of Aquaterra Energy, said: “The reduction of government debt for the UK is excellent news for the oil and gas industry; and will free up more government funds for investment in prolonging the life of existing oil and gas infrastructures, and revitalising offshore exploration, following the recommendations from Sir Ian Wood in February.”
“This will provide a stronger period of growth for the UK economy, with Sir Ian Wood predicting these recommendations could create up to £200 billion for the UK over the next twenty years. Aquaterra Energy believes that further collaboration between the government and industry will also help to create a more sustainable energy industry for the future.”