LONDON, Sept 19 (KUNA) -- The UK government minister Lord Sassoon is to
lead an investor road-trip to the Middle East as Britain plans to sell more of
its debt in the international market, it was revealed here Sunday.
The Treasury Minister will boost a delegation that includes Robert
Stheeman, the head of the UK's Debt Management Office, and other Government
officials, tasked with explaining the case for buying gilts, the Sunday
Telegraph newspaper said.
Lord Sassoon told The Telegraph: "Ministers usually go abroad to talk to
investors about trade relations or equity investments.
"Debt has not been an issue previously. But now we have this huge increase
in debt burden, things have changed. Even though the outlook is favourable on
gilts, I think it is right to pay investors the courtesy of seeing them face
to face and listening to their concerns and understanding what they want."
The tour will last four days and take in ministers, investors and sovereign
wealth funds in Saudi Arabia, Dubai, Abu Dhabi and Kuwait.
The delegation will explain the Coalition Government's new economic and
fiscal policies and reassuring investors that the UK will not follow Greece
and other European countries into a sovereign debt crisis.
One London-based sovereign debt specialist said: "There's a suspicion in
the markets that the UK is teetering on the edge of a crisis.
Clearly gilts have held up despite it all but this delegation is a good
idea to cement investors' faith."
He added: "There's a huge amount of money looking to be deployed and the
Government is right to tap into it for a more stable base."
Lord Sassoon, who is thought to be the first Government minister for
decades to lead a delegation to sell British debt, said: "It's good to be able
to talk to investors at a time when the outlook is good for gilts, rather than
have to try and sell the story at a time of stress like the Greek and Spanish
Last week Mervyn King, the Governor of the Bank of England, warned the
trade unions that Britain must push through a "credible" deficit-cutting plan
to avoid the soaring borrowing costs that have afflicted some eurozone
He told the Trade Union Congress conference in Manchester, northern
England: "Market reaction to rising sovereign debt can turn quickly from
benign to malign, as we saw in the euro area earlier this year.
It is not sensible to risk a damaging rise in long-term interest rates that
would make investment and the cost of mortgages more expensive."
The UK already has a strong trade agreement with the Gulf. In 2009 it
signed a memo of understanding with UAE that set a target to increase
bilateral trade by 60pc to 12 billion pounds.
Last year, Britain exported more goods and services to the Gulf states than
India and China combined.
At the same time, the Gulf states have invested millions in buying stakes
in UK companies and properties, the paper pointed out. (end)
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