UK Borrowing pressures ease (a little!)

The latest data just published shows that the UK Government has borrowed less money from the financial markets than had been expected. The hard figures revealed in today's FT (page 2, FT, 1/9/10) indicates that the UK will now borrow some £45bn in the next four months as opposed to the expected £55bn in this period. The borrowing process is managed by the Debt Management Office (DMO) and it has taken advantage of the strong demand from large institutional investors and consequently sold more UK bond issues than was initially scheduled at this stage of the financial year. This has been made easier by the sharp fall in UK bond yields which has resulted in lower government borrowing costs. According to the FT article the average yield fell to under 3% at the end of June 2010. You can read more about the underlying economics of Government finances in Topic 11 of Reading and Understanding Economics.