UK Sovereign

A city in the north-east of Scotland that has been generating headlines of late for its links to the troubled oil market — as well to Donald Trump — is set to hit the road for a sterling bond issue.

UK government bonds this week joined the country’s currency in taking a hammering, but public sector bankers are confident that a scheduled Gilt syndication next week will go well — and there could also be arbitrage opportunities in sterling.

Bank of America Merrill Lynch has reshuffled the senior management of its debt capital markets and corporate banking teams in London.

UK government bonds have suffered their biggest monthly loss in over 20 years this week, although the price had begun to recover by Wednesday morning, with a syndicated tap set for later this month.

Barclays, Lloyds Bank, Nomura and Royal Bank of Scotland will run the sale, scheduled for the week beginning October 24.

UK government bond yields fell on Thursday, despite the Scottish government starting the process of launching a second independence referendum.

The UK Debt Management Office will transfer its responsibility to provide reference prices on the £1.4tr Gilts market to FTSE Russell and Tradeweb, likely by the spring of next year.

UK chancellor of the exchequer Philip Hammond abandoned on Monday his predecessor’s ambition to pay off the country's public debt by 2020 but renewed its commitment to fiscal consolidation. SSA bankers responded by predicting higher government borrowing.

The London Stock Exchange this week moved to deflect a mounting list of European Commission concerns about its proposed merger with Deutsche Börse by saying it would consider selling off its LCH SA French clearing business.

The aftermath of the UK’s decision to leave the European Union has been an uneasy calm. Inflation is at a 20 month high of 0.6%, unemployment is at a post-crisis low, and consumer spending is robust. But then of course, nothing has happened yet.

Moody's will review the UK's credit rating on Friday. While the Brexit vote prompted Moody’s to change its outlook for the UK’s Aa1 credit rating to negative, Moody’s representatives have said the UK could regain credit stability if it commits to keeping its debt to GDP ratio in check.

The last round of IMF lending to developed market countries (before the European sovereign crisis) was 40 years ago this autumn — when Britain was locked out of the capital markets and had to go ‘cap in hand’ to the Fund.