The United Kingdom’s government plans to sell more bonds over the next three months than it previously planned for the entire financial year to fund a surge in public spending in the face of the coronavirus crisis.
The UK Debt Management Office (DMO) said on Thursday it planned to issue 180 billion pounds ($222.43bn) of government debt between May and July to finance the unprecedented measures announced last month to avert the collapse of the UK’s economy.
Previously, the DMO planned to sell 156.1 billion pounds ($192.68bn) of bonds between April 2020 and March 2021.
“This higher volume of issuance is not expected to be required across the remainder of the financial year,” the UK’s finance ministry said.
In March, the UK promised 30 billion pounds ($37bn) in measures to support public healthcare, affected businesses and provide broader economic stimulus in the face of the coronavirus outbreak.
UK government bond yields rose slightly in early trade on Thursday.
A Reuters survey of 11 primary dealers had predicted the DMO would announce bond issuances of about 300 billion pounds ($370.31bn) for the 2020/21 financial year as a whole.
So far, investors have shown little sign of baulking at the jump in public borrowing although the Bank of England has agreed to expand the government’s overdraft facility at the central bank, in case it struggles to raise cash in the debt market.
The finance ministry said a further update to the DMO’s debt sales plan would be announced on June 29.
More than 18,000 UK citizens have died in hospital of the disease so far, and the country is now in its fifth week of a lockdown that stops most people from leaving home other than to buy food, exercise, or undertake essential work.
The government plans to test a sample of 20,000 UK households for COVID-19 in the coming weeks to establish how far the disease has spread in the country, Minister of Health Matt Hancock said on Thursday.
But the UK has been criticised for its slow response to testing and containing the virus, with Deutsche Bank saying the country is likely to be one of the world’s laggards to exit the stringent lockdowns imposed to curb the coronavirus spread.
“The UK is lagging behind almost any medium to large economy globally when it comes to coronavirus tests,” Deutsche Bank’s Oliver Harvey said in a note to clients on Thursday.