Record gilts auction due

THE BANK of England yesterday announced its largest gilts auction, which will leave about 80 per cent of the Government's borrowing requirement financed after just seven months of the financial year.

Don Smith, of Midland Global Markets, said the auction would leave about pounds 8bn of the year's pounds 49bn or so of gilts issues to come.

The Bank will auction pounds 3.5bn of 6 per cent Treasury stock due 1999 on 27 October. Good demand is expected because the stock will next year be a five-year benchmark. There will be no auction in November. The next is thought likely in early to mid-December.

The announcement that there would be no November auction saw a late surge in the market. The 9 per cent due 2008 rose pounds 11 16 to pounds 1175 32 , with shorter-dated stocks still buoyed by rate cut hopes.