UK Should Double Bill Sales to Help Gilts, Morgan Stanley Says

The UK should double its issuance of government bills to ease strains in the gilt market and lower borrowing costs, according to Morgan Stanley strategists.

Increasing sales of bills, which are short-term debt instruments maturing in a matter of months, will reduce the UK’s average cost of funding while diversifying its investor base, a team led by Fabio Bassanin said in a research note. Improving their tax treatment and launching a one-year tenor would help boost demand, they said.