Departing Debt Chief Warns Successor of Risks Associated with Borrowing at Large Scale
Sir Robert Stheeman, CEO of the Debt Management Office, emphasized the significant challenge his successor will face in managing the office’s need to borrow substantial amounts annually.
The incoming debt chief of the government will confront risks associated with high levels of public borrowing, as stated by the outgoing debt chief on Tuesday.
Sir Robert Stheeman, the CEO of the Debt Management Office (DMO), highlighted the necessity to raise “well in excess of £200 billion” each year.
The DMO is preparing to issue £265.3 billion of UK government bonds, known as gilts, in the fiscal year 2024/2025. This is the second-highest amount on record after £485.8 billion issued in 2020/2021.
Comparatively, before the COVID-19 pandemic, the annual issuance of gilts by the DMO ranged from £8.2 billion to £165.1 billion over a decade.
“The sheer numbers are going to be very big and that must bring risks, that must have challenges,” Sir Robert told Reuters.
The retiring debt chief will leave the post at the end of June after serving for about 21 years. The Treasury announced last year that his successor would be appointed in early 2024 to allow for a transitional period, but the appointee remains undisclosed.
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“I’m optimistic that all will be revealed in the not too distant future,” Sir Robert said.
Recently, Sir Robert noted a gradual decrease in demand for long-term gilts by the DMO.
His comments follow a warning from Maxim Rybnikov, S&P’s primary sovereign analyst for the UK, regarding the careful navigation needed by the next elected official to avoid further credit rating deterioration.
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Reuters contributed to this report.
